A Consumer Proposal And Your Credit Rating

2012-03-23   minute read

Person talking on a cellphone looking at spreadsheets on their laptop

Watch the video or continue reading below. In Canada, creditors assign credit ratings on a scale of 1 to 9, with 1 meaning your payments are being made on time and 9 meaning your debts are in collection or considered uncollectible.Different Credit Ratings For example, R-1 is your best rating for revolving credit, such as credit cards or lines of credit. An I-9 rating means that your bank installment loan is considered uncollectible or has been assigned to collection by your creditor. Your credit rating will be revised to R-9 and I-9 status upon filing a Consumer Proposal, until you complete it. Once you’ve finished your Proposal payments, your rating in all provinces will change to R-7 and I-7 for 3 years as a credit arrangement. As a proposal can be repaid over a maximum of 5 years, these ratings can remain on your credit for up to 8 years. For example, if your Proposal is repaid over 2 years, the Proposal remains on your credit report for a total of 5 years.Considering a Consumer Proposal If you’re considering a Consumer Proposal, chances are you already have some blemishes on your credit. As an example, debts with collection agencies will remain on your credit file for 6 years in all provinces once they’ve been assigned. If you don’t qualify for a debt consolidation loan because of your credit history but still have the ability to make regular payments, a Consumer Proposal can be a great solution to stop interest charges, deal with collection calls and combine your unsecured debts into one affordable payment. For more information on how a Consumer Proposal may help you, pleasecontact me directly or consult ourConsumer Proposal FAQ.

Consultation icon