Small loan with a bad Equifax file in Canada

A low score or a negative entry at Equifax Canada does not make borrowing impossible, but it changes who will lend to you and at what price. Outside Quebec, many of the lenders that approve applicants with damaged credit charge rates close to the legal maximum, so understanding your file and your options matters more than finding the fastest approval.

This page explains what Equifax and TransUnion record, how long negative information stays, how to check and dispute your file, what the criminal interest rate means for small loans, and which safer routes exist. Mini-pret.com does not lend money, broker loans or pass your details to lenders. For Quebec, where consumer credit is governed by provincial rules administered by the Office de la protection du consommateur, see our guide to small loans in Canada and Quebec.

Equifax and TransUnion: Canada's two credit bureaus

Canada has two national credit bureaus, Equifax Canada and TransUnion Canada. Banks, credit unions, card issuers, telecom companies and some lenders report to one or both. Because reporting differs, your two files may not be identical: a collection account may appear at Equifax and not at TransUnion, or the reverse.

A credit file typically contains your identity details, your credit accounts and their payment history, credit inquiries, accounts sent to collection, and public records such as bankruptcies or consumer proposals. Your credit score is calculated from this data, and different lenders use different scoring models.

What "bad Equifax" usually means

• Late payments reported by a lender, rated by how many days past due.
• Collection accounts: unpaid debts passed to a collection agency, sometimes for old phone or utility bills.
• Charge-offs: debts the lender has written off but which are still owed.
• Consumer proposals or bankruptcy filed through a Licensed Insolvency Trustee.
• Many recent hard inquiries, which can signal that you are seeking credit everywhere.

Negative information does not stay forever. Most items are removed after a number of years that depends on the type of entry and on your province, and a first bankruptcy is generally removed several years after discharge. The bureaus publish their retention periods.

How to check and dispute your file

You can obtain your credit report free of charge from both Equifax and TransUnion, online or by mail. Check each file line by line:

• accounts you do not recognise, which may signal identity fraud;
• debts that were paid but still show as outstanding;
• the same debt listed twice, once by the original creditor and once by a collector, with two balances;
• entries that should have expired.

If you find an error, file a dispute with the bureau, which will investigate with the company that reported the data. Keep copies of receipts and letters. The Financial Consumer Agency of Canada (FCAC) publishes step-by-step guidance on reports and disputes.

The legal cost limit

Canada's Criminal Code sets a criminal interest rate. Since 1 January 2025, it has been set at an APR of 35%, replacing the previous much higher ceiling. Payday loans are treated separately: they are regulated by the provinces, which set their own cost limits, licensing and cooling-off rules, and a federal limit on the cost of payday loans also applies.

For borrowers with bad credit this has two consequences. First, many instalment lenders that serve this market price their loans close to the 35% limit. Second, any offer above that limit, or a "fee" structure designed to hide the true cost, is a serious red flag.

Realistic options with a damaged credit file

Your bank or credit union

A credit union where you already have an account may consider your whole relationship, not only your score. Ask about small personal loans, overdraft protection or a "credit builder" product.

Secured credit card

A secured card, backed by a deposit you provide, does not give you cash today, but used carefully it is one of the most reliable ways to rebuild payment history with the bureaus.

Instalment lenders for subprime borrowers

These lenders accept lower scores but charge high rates and often add optional insurance. Compare the APR and total cost, and check that the lender is licensed in your province where licensing is required.

Payday loans

Payday loans are short and expensive, and repeat borrowing is common. They should be a last resort, not a way to cover regular expenses. See our page on bad credit borrowing for the general risks.

Checklist before applying

• Pull both your Equifax and TransUnion reports and fix errors first.
• Calculate the APR and the total cost in dollars, including insurance and fees.
• Confirm the lender's licence with your provincial consumer protection office where applicable.
• Avoid multiple applications in a short period.
• Make sure the payment fits your budget without borrowing again.

Scam warning signs

• "Guaranteed approval, no credit check" combined with a request for an upfront fee.
• Payment requested by gift card, e-transfer to an individual or cryptocurrency.
• Credit repair companies promising to erase accurate negative information for a fee.
• Lenders found only on social media, with no physical address or provincial licence.

Help with debt

Non-profit credit counselling agencies can review your budget and may arrange a debt management plan with your creditors. A Licensed Insolvency Trustee can explain consumer proposals and bankruptcy; the first consultation is usually free. Government benefits may also be available: check the federal benefits finder and your province's programs. If several loans are piling up, read our guide to consolidating small debts before adding another.

Rebuilding your file over time

Credit repair has no shortcut. Paying every bill on time, keeping card balances well below their limits and avoiding new applications for a few months will gradually improve your score with both bureaus. Recent payment behaviour weighs more than old problems, so a year of clean history often makes a visible difference. Check your reports again after that period to confirm that paid collections and expired entries have been updated.