A consumer proposal temporarily lowers your credit score, but most people see real improvement much sooner than they expect.
The proposal reduces your debt (often by about 70%) and replaces everything with one predictable payment. As your finances stabilize, your credit score naturally begins to rise again because your entire financial picture becomes more manageable.
A consumer proposal temporarily lowers your credit score, but most people see real improvement much sooner than they expect. The proposal reduces your debt (often by about 70%) and replaces everything with one predictable payment. As your finances stabilize, your credit score naturally begins to rise again because your entire financial picture becomes more manageable.
Let’s fix that credit score!
When you file a consumer proposal, an R7 rating appears on your credit report. This rating tells lenders that you are repaying a portion of your debt through a government-approved settlement. It is not permanent, and it is far better than an R9 rating, which is used for bankruptcy.
Your score typically drops right away, but improvement begins once your financial foundation becomes stable. With interest frozen and your debt cut to a realistic amount, you stop relying on credit to survive — and this is one of the biggest factors behind score recovery.
Your credit score often starts rising when your financial habits become consistent again. This usually happens within a few months because your debt stops growing and your balance begins to fall. Most people see improvement when they pay their proposal on time every month, use a secured card responsibly, reduce their credit utilization, avoid missed or late payments, and show steady, predictable financial behaviour.
Because your debt is dramatically reduced — often to around 30% of the original balance — your credit profile becomes healthier almost immediately.
One of the strongest credit-scoring factors is your debt-to-income ratio. When you enter a consumer proposal, your debt drops sharply. This alone helps your credit score because you suddenly move from “overextended” to “manageable.” By reducing your debt by about 70%, your credit score has more room to grow, even if the R7 rating is still on your report.
You can rebuild while the proposal is active. Most people start with simple, safe tools like a secured credit card, a small credit-builder loan, on-time payments for everyday bills, maintaining a low balance, and avoiding new debt. These actions help you create new positive history, which offsets the R7 rating much faster than most people expect.
The R7 rating stays on your report for the duration of your proposal plus three additional years after completion. However, most lenders focus on recent behaviour rather than older negative marks. If you show consistent on-time payments, many lenders will work with you long before the R7 disappears.
People are often surprised when they ask how much their credit score will improve after a consumer proposal. The truth is that steady payments, lower debt, no interest, and new positive routines lead to score growth even while the proposal is still active. Many people see better credit scores just 12 to 18 months into their proposal.
Your score improves because a proposal gives you predictable payments, lower overall debt, less financial stress, no interest, and fewer accounts in arrears. These changes create the exact environment that credit scoring models reward.
All unsecured debts, credit cards and unsecured loans can be applied to a consumer proposal, getting you completely debt free in 5 years or less!
This consumer proposal calculator shows an approximate of how much you could save.
If you’re feeling overwhelmed by debt and not sure where to start, the best thing you can do is talk to someone who understands.
Call now and speak directly with me — Kelly Dey — for clear, honest advice that’s tailored to your situation. There’s no pressure and no judgment. We’ll look at your options together and create a plan that helps you breathe again. Getting started is easier than you think, and one simple conversation can put you back in control of your money and your life.
Let’s take that first step today, call 905-721-7506.
A. Most people see significant gains because their debt drops, their payments stabilize, and they build new positive credit. It’s common to see steady increases throughout the proposal.
A. Yes. Early payoff removes the proposal from the “active” section of your credit report and starts the three-year countdown sooner.
A. Many people do. Lenders look at your payment history and your new financial stability. If your proposal is in good standing, approval is often possible.
A. Yes. Secured cards help you rebuild safely because you control the limit. Keeping the balance low and paying it off each month shows lenders you are dependable.
A. Yes. Lower debt makes you less risky in the eyes of lenders. Once your debt load drops, lenders often become more open to offering new credit products.
Insolvency Trustee – Kelly Dey
If you’re feeling weighed down by money or debt issues, give me a call at 905-721-7506 and lets just have conversation.
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Carla M.
4 days ago
★★★★★ I was worried my credit would never recover, but it started improving just a few months after filing. Cutting my debt by about 70% made rebuilding so much easier.
Daniel P.
1 week ago
★★★★★ I got a secured credit card while still in the proposal, and my score went up steadily. With interest frozen and one small payment, everything finally felt manageable.
Melissa R.
2 weeks ago
★★★★★ I thought the R7 rating would hold me back, but lenders were more understanding than I expected. My score has gone up each month as my debt keeps going down.
Andrew V.
3 weeks ago
★★★★★ Once my balances dropped, my credit started to improve quickly. The proposal made everything predictable, and rebuilding felt realistic for the first time in years.
Shania L.
1 month ago
★★★★★ I checked my credit after a year and was shocked at the progress. The proposal helped me stay on track, and the savings gave me room to focus on rebuilding.
Rise Above Your Debt!
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