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How will a Consumer Proposal impact my credit score?
Discover how a Consumer Proposal can affect your Credit Score, and what you need to consider with your debt.
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How will a Consumer Proposal impact my credit score?
The process of filing a Consumer Proposal is intended to help you settle your debts without the long-term consequences of a bankruptcy. With that said, there will be some immediate impacts to your credit score which you should be aware of. These will affect your ability to borrow money for the first few years after your claim.
A Consumer Proposal is recorded in your credit bureau. This information is available to credit grantors and may affect your ability to get credit in the future. However, if you have currently missed payments to your creditors or find yourself in collections already, this information is most likely already reflected on your credit rating.
Filing a Consumer Proposal is generally reported on your credit rating for shorter period, (usually 3 years) and usually considered a better rating than if you file for bankruptcy (reported for 6 years under a bankruptcy).
Eliminating your debts is the best option to improving not only your credit score, but also improving your true credit worthiness.
For three years after your final payment, a note will appear on your credit report indicating that you entered into an arrangement to settle your debts. This will make it more difficult to secure new loans, credit cards, and other forms of financing. It may cause lenders to require a co-sign to issue new debt or mean you will be charged higher interest rates if you do get approved.
The good news is, that the affect on your credit score is less negative that a bankruptcy. And there are things you can do during and after the filing of your proposal that will improve your credit score. These include:
- continuing to make payments to other credit granters that report to the credit bureaus during the proposal
- staying current with ongoing credit granters throughout the proposal
- applying for secured credit cards or other approved sources of credit during the proposal
Under a proposal you can accelerate your payments. the sooner you complete your proposal payments, the sooner your credit score will begin to improve.
What About Utility Companies?
A utility company cannot cut off service if a Consumer Proposal is filed even if you owe them at the time of filing. They could elect, however, not to supply further services unless an arrangement is made for payment for future services.
Consumer Proposals vs Personal Bankruptcy
Is a Consumer Proposal right for You?
If you are struggling to pay off your debts and keep current with family expenses, a consumer proposal may be right for you.
Under a Consumer Proposal you make an offer, or a proposal, to your creditors based on one fixed monthly payment you can afford. This offer is made to your creditors with the assistance of a Licensed Insolvency LIT/Administrator like C. E. Craig & Associates Inc.
Our debt elimination team will work as a mediator between you and your creditors – to help negotiate the best deal possible for all parties.
A consumer proposal is not the right choice for everyone. But it may be the right choice for you. You owe it to yourself to take advantage of this fully legal and responsible solution.
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Consumer Proposal Resources & Information
Read the latest guides, insights, and resources prepared by our team to help you have peace of mind with your consumer proposal.
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- Financial Literacy
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- Personal Bankruptcy
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By Colleen Craig, CPA, CA, FCIRP • March 25, 2026If you’re considering a bankruptcy or consumer proposal, one of the most common and important questions is: How do Licensed Insolvency Trustees get paid? Many people worry about hidden fees -
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By Colleen Craig, CPA, CA, FCIRP • January 29, 2026Student loan debt is one of the most common financial pressures we see in our British Columbia insolvency practice, particularly when combined with credit cards, lines of credit, or tax -
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By Colleen Craig, CPA, CA, FCIRP • July 16, 2025In today’s economic climate with rising interest rates, inflation pressures, and unpredictable expenses. Living debt-free may feel like an impossible dream. But with discipline, planning, and a few smart habits,
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There can be many solutions to debt problems and every person’s story is unique. At C.E. Craig & Associates Inc. we take the time to listen to you – to help find the best option for you. Every journey begins with one single step.