Does consumer proposal affect credit?

_{consumer proposal, credit score, British Columbia}

A consumer proposal can definitely affect your credit score, hitting it with an R7 rating. This is like a guest who hangs around too long, sticking to your report for up to six years from when it’s filed, or three years post-payment completion. If you’ve got questions or feel overwhelmed, don’t hesitate to reach out via phone, text, or live chat.

Show Table of Contents

_{Impact of a consumer proposal on your credit score.}

Consumer Proposal Question

Does consumer proposal affect credit? If I choose a consumer proposal, how will it impact my credit score?

From: Anonymous Question
Location: Saanich, British Columbia (BC)
Category: consumer proposal

Consumer Proposal Answer

Absolutely, a consumer proposal is going to leave quite a mark on your credit. Picture this: you’ve filed a consumer proposal in Canada, and now it’s got two cameos on your credit report. The first is in the legal or public records section, showing off details like the type of proceeding, the date you filed, and when you’ll wrap it up. Now, imagine each creditor in the proposal pulling the curtain back on your debts, labeling them as “included in a proposal.” Cue the credit rating change to an R7—definitely not a gold star on the Canadian R1-R9 scale. This R7 rating is like that friend who overstays their welcome, hanging out on your report for up to six years from when you filed or three years after you’ve dotted the i’s and crossed the t’s on your payments—whichever bids adieu first. If you’re interested in understanding the impact on your credit score further, you can learn about the credit score impact of a consumer proposal.

From: Insider Adam

Office of the Superintendent of Bankruptcy (OSB) Answer

A consumer proposal does affect your credit score. When you file a consumer proposal, it is recorded on your credit report as an R7 rating, which indicates that you are in a formal debt settlement process. This entry will remain on your credit report for three years after the proposal has been completed or for a total of six years from the date you file, whichever comes first. This information is outlined in the Bankruptcy and Insolvency Act, specifically under sections detailing the impact of debt relief measures on credit ratings.

From: OSB Helper

Related Questions to Credit Score

Here are the top 5 most frequently asked questions related to the impact of a consumer proposal on credit, based on common concerns and online search trends:

1. How does a consumer proposal affect my credit score?

A consumer proposal will initially lower your credit score and limit your ability to obtain new loans.

2. How long does a consumer proposal stay on my credit report?

A consumer proposal will stay on your credit report for a maximum of six years from the date you file, or three years after you complete the proposal, whichever is earlier.

3. Can I get credit after filing a consumer proposal?

Yes, you can get credit after filing a consumer proposal, such as a secured credit card, and can start rebuilding your credit score during the proposal period.

4. How does a consumer proposal appear on my credit report?

A consumer proposal appears in the legal or public records section and in the individual credit accounts section of your credit report, with an R7 credit rating for each included debt.

5. Can I rebuild my credit after completing a consumer proposal?

Yes, you can rebuild your credit after completing a consumer proposal by monitoring your credit report, using a secured credit card, paying bills on time, and keeping credit utilization rates low.

If you have a question about debt see our debt questions or ask your own debt related question.

References

_{Table of article references}