A consumer proposal closes out a difficult chapter, but the credit rebuild is a separate project. The proposal itself does not fix your score. The reporting window does not automatically end the moment you make your last payment. And what you do in the first 12 months after completion determines whether you recover in 2 years or 5.
This guide is the complete playbook for Canadian rebuilders: how a consumer proposal shows on your reports, the three timing numbers that control your exit, the year-by-year rebuild sequence, and the specific moves that compress the recovery window without triggering new problems.
For the broader view of Canadian credit repair, start with our complete guide to Canadian credit repair. If you want the shorter action-focused version of this piece, see our 5-move action plan for rebuilding after a consumer proposal. If you are deciding whether to file in the first place, this guide is not the right starting point: talk to a Licensed Insolvency Trustee first.
What a Consumer Proposal Actually Is
A consumer proposal is a legal debt-settlement arrangement filed under the Bankruptcy and Insolvency Act through a Licensed Insolvency Trustee (LIT). You and your LIT propose to your unsecured creditors to pay a reduced amount (typically 30 to 50 cents on the dollar) over a maximum of 5 years. If creditors holding a majority of the debt accept, the proposal binds everyone and you make consolidated monthly payments until it is complete.
A consumer proposal is legally distinct from bankruptcy. It is not a declaration of insolvency in the bankruptcy sense, you keep your assets (including any home equity in most cases), and the reporting treatment is meaningfully lighter. But it is a formal BIA filing, and it shows on your credit report.
Critically, a consumer proposal is unique to Canada. Most American credit rebuild advice (Chapter 7, Chapter 13) does not map to our system. The only legal process in the US that is even approximately comparable is Chapter 13, and the timelines and reporting rules are different.
How It Shows on Your Credit Report
On both Equifax Canada and TransUnion Canada, a consumer proposal appears under public records with:
- The date the proposal was filed (signed).
- The date it was completed (all payments made in full or the arrangement closed).
- An indicator showing completion status.
- An R7 rating on every account that was included in the proposal. R7 means 'regular payments under a consolidation order or similar arrangement' and is the standard code for consumer proposal accounts. R7 is distinct from R9, which is reserved for bankruptcy or written-off bad debt.
The R7 ratings on the individual accounts typically drop off the report when the accounts themselves age off (6 years from last activity, under most provincial caps). The public-record proposal entry is what the bureaus hold longer. For the detailed reporting mechanics, see how long a consumer proposal stays on your credit report.
The Three Timeline Numbers You Need to Understand
There are three separate clocks, and confusing them is where most rebuilders lose time.
**3 years from completion.** Equifax Canada removes a completed consumer proposal 3 years after you finish paying it off. This is the standard, most-cited rule and it applies uniformly on Equifax.
**6 years from filing.** TransUnion Canada uses the earlier of 3 years from completion or 6 years from the date filed, whichever comes first. This matters: if your proposal took 4 years to complete, TransUnion would drop the entry at 6 years from filing (2 years after completion), earlier than the 3-years-after-completion rule.
**R7 account ratings.** Individual R7 entries on accounts in the proposal typically age off when those specific accounts hit their own 6-year reporting window, which is measured from the last activity date.
In practical terms: if you finished a standard 4-year proposal, expect the entry to drop from TransUnion around year 6 from filing (2 years after completion) and from Equifax at 3 years after completion. Your credit score recovery happens continuously during this window, not only at the end.
The Rebuild Arc: Month 0 to Year 5
The rebuild is not waiting. It is an active sequence. Here is the full arc, phase by phase.
**Month 0 to 6: Immediate Foundation.** The day your LIT confirms completion, do these in the first 60 days:
1. Pull both your Equifax and TransUnion reports (free from each bureau). Verify completion is properly recorded. If the proposal still shows as active on either report 60 days after completion, file a dispute with the correct bureau attached to your LIT's completion letter.
2. Open a secured credit card from a mainstream bank. Put down $500 to $1,000 as the deposit. Use it for one or two small monthly purchases and pay the statement balance in full every month. This is the single most important move of the entire rebuild.
3. Set up automatic payments on every existing bill: cell phone, utilities, rent. Missing any payment in the first 12 months after a proposal delays recovery disproportionately.
4. Start an emergency savings account with automatic transfers, even $25 per paycheque. Lenders looking at your file 12 to 18 months from now will see this savings history as risk-mitigating.
5. Do not apply for any new credit beyond the one secured card. Additional hard inquiries during this period have outsized negative impact.
**Year 1: Establishing Positive History.** Months 6 to 12 after completion. You should now have 6 months of perfect payment history on the secured card showing on both reports.
- Add a second credit-building product: a credit-builder loan from a credit union or one of the fintech products designed for this purpose. These operate as small instalment loans where the money is held in savings during the loan period, creating reported instalment history.
- Check your scores monthly. By month 12, most rebuilders from a completed proposal are showing Equifax scores in the 580 to 640 range, depending on starting point and completeness of the proposal entries.
- If any errors appear on your reports, dispute them immediately. Recently-completed proposals are a common source of bureau reporting errors. For the full dispute process, see how to dispute errors on your Canadian credit report.
- Ignore pre-approved credit card offers for premium cards. They are usually not actually approved and the hard inquiry from applying will hurt you.
**Year 2: Expanding Your Profile.** Months 12 to 24. Your file now has 12 months of secured-card history and an instalment loan.
- Apply for your first unsecured credit card. Start with the bank where you already have the secured card. Look specifically for 'credit rebuild' or 'basic' unsecured products, not premium cards.
- Consider asking a family member with strong credit to add you as an authorized user on one of their long-standing cards. Authorized user history can add 5 to 10 points to your score.
- Use credit actively but keep utilization below 30% on every card. Ideally below 10%.
- If you have been paying perfectly for 18 months, ask your bank to convert your original secured card to unsecured. Most will do this at 12 to 24 months of clean history.
**Year 3: The First Exit Window.** Months 24 to 36. Equifax should be removing the proposal at the 3-year-from-completion mark, which typically produces a 30 to 80 point score jump on Equifax and makes you visible to more lenders. TransUnion's removal depends on your proposal length: if your proposal was short, TransUnion removes at the 3-year-from-completion mark alongside Equifax; if your proposal ran 4 or 5 years, TransUnion may already have removed it earlier under the 6-years-from-filing cap.
- Once the first removal happens, reapply for credit products you were previously declined on. Some lenders pull one bureau primarily, and those approvals become feasible as soon as that bureau's entry is gone.
- If you are planning a mortgage application in the next 12 months, this is when serious preparation starts. See what credit score you need for a mortgage in Canada for bank-by-bank thresholds.
- Do not add aggressive new debt at this point. The score boost from the TransUnion removal takes 2 to 3 months to fully stabilize.
**Year 4 to 5: Prime Credit Territory.** Most rebuilders from a completed proposal are in the 680 to 720 range by year 4 with consistent execution, and approaching prime credit (720+) by year 5. Some reach prime earlier, particularly if the starting point was high and the proposal was brief.
At this point, both the Equifax and TransUnion entries should have dropped, and both reports read cleanly. The original R7 accounts have aged off or are close to it.
Special Situations
Several situations change the standard rebuild playbook in specific ways.
**Multiple consumer proposals.** A second proposal typically carries a longer reporting window than the first and is weighted more heavily by lenders. The specific mechanics vary by bureau and by province, so verify with your LIT and pull both reports during the second filing so you know your exact exit dates. The credit consequence of a second proposal is meaningfully worse than a first.
**Unfinished or annulled proposals.** If your proposal was annulled (you missed payments and it was cancelled), you are typically back to the original debt situation plus the proposal annulment now on your file. This is the worst reporting outcome. Working with your LIT to file a new proposal or pursue bankruptcy may actually be the faster credit recovery path compared to carrying annulled-proposal status.
**CRA debt.** Canada Revenue Agency debts can be compromised in a consumer proposal. CRA votes like any other creditor, and a proposal that passes on the majority-by-value vote binds CRA just as it binds other creditors. In practice, large CRA balances often require CRA to be comfortable with the terms before the proposal will pass: CRA may vote against a proposal that offers too little, or demand amendments. Talk to your LIT about how the CRA portion of your debt will be treated in your specific proposal.
**Student loans.** Federal and provincial student loans have special rules under the Bankruptcy and Insolvency Act. Section 178(1)(g) establishes a 7-year rule for bankruptcy discharges: student loans where the applicant ceased to be a full-time or part-time student less than 7 years before filing survive bankruptcy. The same 7-year boundary is commonly applied in practice to proposals as well, though a proposal can technically include a student loan if the relevant creditor accepts the proposal as an unsecured claim. The practical outcome is that student loans less than 7 years old typically carry forward after a proposal and continue to require repayment.
**Alimony and child support.** Not dischargeable through a consumer proposal under any circumstances. These obligations continue after proposal completion.
**Secured debts (mortgages, car loans).** Not included in the proposal by default. You continue paying those as normal. The rebuild framing in this guide is for unsecured credit; your secured debts follow their own timeline and status.
Mortgages After a Consumer Proposal
This is the question we get most often. The short answer: mortgage qualification depends on your credit file looking clean enough to pass a stress test, and that usually means waiting until the proposal entry is off at least one bureau.
**During the proposal.** Some B-lenders and credit unions will consider a mortgage during an active proposal, usually at elevated rates and with larger down payments (often 20%+).
**Year 1 to 2 after completion.** A-lenders (the major banks) typically will not approve. B-lenders and credit unions will, with 15 to 20% down and rates 1 to 2 percentage points above posted.
**Year 3 after completion.** Once Equifax removes the proposal at the 3-year-from-completion mark (and TransUnion has removed too, either at the same time or earlier under its filing-date cap), some A-lenders become feasible. 10 to 15% down is typical at this stage.
**Year 4 to 5.** A-lender pricing becomes comparable to standard, though some files still require explanation letters at this stage.
CMHC-insured mortgages have their own rules. CMHC requires that any prior insolvency be fully discharged and that the applicant demonstrate re-established credit for at least 2 years before application. Your lender's underwriter will look for a well-established post-proposal file, not just the absence of the proposal entry.
For the full denial-and-reapply playbook if you have already been turned down, see credit repair after a denied mortgage.
Business Credit After a Consumer Proposal
If you are a business owner who went through a proposal, or if you are now starting a business after one, the business side has its own sequence. Your personal proposal appears in any business credit underwriting that pulls personal credit (which is most business lending in Canada).
- **Year 1 to 2 post-proposal.** Bank business lending is effectively closed. BDC is hard. Secured business credit cards and supplier tradelines remain open.
- **Year 3 to 4.** BDC becomes feasible, particularly for equipment-secured loans. Some B-lender business financing options open up.
- **Year 5+.** Mainstream bank business lending is possible with standard underwriting plus a personal guarantee. The proposal history still shows in underwriting context but no longer causes automatic decline.
If you are actively running or starting a business through this window, the narrower sequence is in our business credit guide for immigrants and first-time founders, and for the low-score parallel strategy, see building business credit when your personal score is low.
LIT vs Credit Repair Service: Who Does What
These are different professions and they do different things. Understanding which one you need when saves both money and time.
**Licensed Insolvency Trustee (LIT).** Federally licensed. Administers your consumer proposal from filing to completion. Issues the completion letter. Does not do credit repair; their job ends when the proposal is complete.
**Credit counselling agencies.** Non-profit (typically). Offer debt management plans (DMPs), budgeting guidance, and financial literacy. Can help with budgeting during or after a proposal but do not influence credit reporting directly. See credit repair vs credit counselling in Canada for the distinction.
**Credit repair services.** Work on your credit report itself. Dispute errors, manage the rebuild sequence, handle bureau correspondence, advise on credit product selection. Start useful as soon as your proposal completes, or even during if there are pre-existing report errors to address.
You may need all three at different points: LIT to file and complete the proposal, counselling to navigate the spending patterns that led to filing, credit repair to handle the rebuild after.
Common Mistakes in the Post-Proposal Rebuild
These cost real time on the rebuild timeline:
- **Applying for too many credit cards in year 1.** Each hard inquiry pulls the score down. Stick to one secured card, one credit-builder loan, until year 2.
- **Missing a payment on anything.** A single 30-day late in the first 18 months after completion can delay recovery by 6 months.
- **Closing old credit accounts that survived the proposal.** Age of credit matters. Keep old accounts open and use them minimally.
- **Not checking the proposal's completion status on both bureaus.** Errors in how completion is reported are common. File disputes immediately if either bureau has it wrong.
- **Co-signing for someone else during the rebuild.** Your name on their debt is your responsibility. Do not add this risk during your own recovery.
- **Paying for premium 'fast credit repair' guarantees.** Anyone promising a specific score jump or a shorter reporting window is misleading you. The reporting windows are regulated. See our credit repair scams in Canada guide for the red flags.
FAQ
**Can I get a credit card during an active consumer proposal?** A secured credit card, yes. Some banks will issue them even during an active proposal if you have a clean payment pattern on the proposal itself. Unsecured cards are generally not approved during the proposal.
**Will my score immediately jump when the proposal drops off?** Yes, usually 30 to 80 points on the bureau that removes it. Both bureaus will likely remove at different times, producing two score jumps roughly 1 to 3 years apart.
**How is Quebec different?** Quebec follows the BIA federally for consumer proposals, so the rebuild mechanics are the same. Provincial consumer protection rules differ slightly but do not change the federal proposal reporting windows.
**Can I dispute the proposal off my report before the window expires?** No. The proposal is an accurate record of a legitimate legal event. Disputes only remove reporting errors, not accurate adverse records.
**Does paying off my proposal early help?** Yes, meaningfully. The 3-year clock at both bureaus starts on completion date, not on signing. Paying early moves your clean-exit date earlier by the same amount.
**What if I cannot afford my proposal payments anymore?** Call your LIT first. Many LITs will work with you to restructure the payment schedule. Missing payments can annul the proposal, which is a worse credit outcome than the proposal itself.
**Can I get a joint credit card with my spouse during rebuild?** Yes if your spouse has good credit. Joint accounts report to both files, so your spouse's history can help you. The risk is that any late payment damages both files.
Your Next Step
The cleanest rebuild starts with a clear-eyed look at your current reports. If you have recently completed a proposal, pull your Equifax and TransUnion reports and verify that completion is properly recorded. If it is, you have all the information you need to start the 24 to 36 month rebuild sequence outlined above.
If your proposal has been complete for a while and your score is not recovering as expected, the problem is almost always either a reporting error or a missed foundational move in the first year. A 20-minute conversation can usually pinpoint which.
Call (437) 755-6579 or book online. Free initial consultation, flat fee if we work together, 8 languages, and a rebuild plan specific to your completion date and what is actually on your reports today.