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How long does a consumer proposal stay on your record?

3 min read

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KOHO

A consumer proposal is a legal agreement between a debtor and their creditors that can help you manage debt and improve your credit score. But how long does a consumer proposal stay on your record? Depending on the credit reporting agency, a consumer proposal can remain on your credit report for either 3 years after you pay off all the debts included in the proposal, or 6 years after you sign the proposal, whichever is sooner. Equifax and TransUnion have different policies for when a consumer proposal is removed from your credit report, so be sure to check with your credit union to find out which policy applies to you.

Equifax

Equifax removes a consumer proposal from your credit report 3 years after you pay off all the debts included in the proposal. It is important to note that this process can take a few months, as it can take up to 90 days for creditors to report the payment to Equifax. Once the debts have been paid off, Equifax will automatically remove the consumer proposal from your credit report after the 3 year period.

TransUnion

TransUnion removes a consumer proposal from your credit report either 3 years after you pay off all the debts included in the proposal, or 6 years after you sign the proposal, whichever is sooner.

Does a Consumer Proposal Affect My Credit?

Yes, a consumer proposal can have a negative effect on your credit score. When you file a consumer proposal, your credit score will be negatively affected, just as it would be if you simply ceased to make your payments. Consumer proposals are an alternative to filing for bankruptcy in Canada. Filing a consumer proposal will typically result in an R7 rating for 6 years from the date the proposal is filed, or three years from the day the proposal is complete, whichever comes first.

How Long Does Bankruptcy Stay on Credit Report in Canada?

Bankruptcy is a serious financial decision that can have a long-term impact on an individual’s credit report. In Canada, (OSB) Office of the Superintendent of Bankruptcy is responsible for administration of the Bankruptcy and Insolvency Act (BIA), as well as certain duties under the Companies' Creditors Arrangement Act (CCAA).

Once an individual is discharged from bankruptcy, the bankruptcy is typically removed from their credit report 6 years after the date they are discharged.

Credit Card with a Consumer Proposal

Having a credit card during a consumer proposal can be a great way to start rebuilding your credit history. While a consumer proposal can stay on your credit report for up to 6 years, having a credit card can help reduce the impact of this. By using your credit card responsibly, you can demonstrate to lenders that you are able to manage credit responsibly and show that you are financially responsible. This can help improve your credit score and make it easier for you to access credit in the future.

A secured credit card is a great way to rebuild your credit history after a consumer proposal. A secured credit card requires a security deposit, which is used to guarantee payment of the balance. This type of card is a safe way to build your credit score, as it will not result in any late payments or other negative activity on your credit report.

Note: KOHO product information and/or features may have been updated since this blog post was published. Please refer to our KOHO Plans page for our most up to date account information!
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