Finances

Credit score after consumer proposal: how it is affected?

If you want to know how a consumer proposal will affect your life and your credit score after a consumer proposal, keep reading our post!

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by Victória Lourenço

Published on 05/20/2022

How a consumer proposal affects your score rating: learn how a consumer proposal will affect your life

Find out what happens to your credit score after a consumer proposal! Source: Adobe Stock
Find out what happens to your credit score after a consumer proposal! Source: Adobe Stock

If you need to file a consumer proposal or have filed, you must wonder: will my credit score be affected after a consumer proposal? Well, The first thing you need to know is that your credit score is very much affected by a consumer proposal. But it is not the end of the world, and we can help you understand more and learn how to rebuild your credit after a consumer proposal.

Also, you might be wondering what more can happen after you file a consumer proposal. How will your life be after filing? And more importantly: how will your life be after making all your consumer proposal payments? Well, we can answer all of your questions! So, keep reading our post to know all about what happens to your financial life after you file a consumer proposal!

zoom of a person sitting on a floor with many papers while holding a calculator

Bankruptcy or consumer proposal

Bankruptcy or consumer proposal? In this post, we will help you understand more about them. That way, you can choose the best option for you to solve your finances!

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After consumer proposal: what happens and how it affects you?

Find out what happens after a consumer proposal! Source: Adobe Stock
Find out what happens after a consumer proposal! Source: Adobe Stock

If you have a lot of debt, you might be one of the many people who think about filing a consumer proposal. Well, this can be a very normal decision given a person’s circumstances. Also, when you research a consumer proposal, you might have come across people saying it will affect your score. But is it true? Well, in short, yes, it does affect your credit score. Therefore, you can be sure that filing a consumer proposal will affect your score.

In addition, there are different ways that you can be affected after filing a consumer proposal. And your credit score is only one of the ways a consumer proposal will affect your financial life. For example, after you file a consumer proposal, you will get away from a consuming gigantic debt. Also, you will have in your hands an agreement saying that you can repay your debt by following a certain repayment schedule.

Besides all of this, you won’t get calls from your previous creditors after you file your consumer proposal. You will need to pay only one monthly payment regarding all your debt in installments. This way, you will have a chance to organize your finances better and complete your debt payment sooner.

However, if your creditors continue to call you, you will need to do something about it. For example, you can call your consumer proposal trustee. This way, your trustee will contact your creditors and explain that they cannot charge you anything anymore. Moreover, if your creditors keep calling you, you can file a complaint against them.

How long does a consumer proposal affect your credit?

You must be wondering how long will your financial life be affected by a consumer proposal. Especially, how long your credit score will be affected. Well, we can help you understand a bit more about how to deal with life after a consumer proposal. So, your credit score will have a significant low after you file a consumer proposal. It is possible that you will go from a good credit score to a poor credit score very quickly.

However, you don’t have to worry about this because you have just taken a big step toward resolving all your financial problems! Also, filing a consumer proposal does not have to be something to be ashamed of because if you don’t start doing something about your finances, you might not get out of debt. In addition, you can start taking small steps toward increasing your credit score after you file a consumer proposal.

Moreover, your consumer proposal trustee company will send your monthly payment reports to the credit bureaus. This way, if you make all your payments on time, you can be sure that you will see some improvement in your credit score.

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How do I rebuild my credit after a consumer proposal?

We can help you rebuild credit after a consumer proposal! Source: Adobe Stock
We can help you rebuild credit after a consumer proposal! Source: Adobe Stock

You can definitely start to rebuild your credit score after filing a consumer proposal. Also, the most important thing you can do is to make all of your payments on time. This will show future creditors that you are responsible and capable of making timely payments. Additionally, try to keep your balances low on any outstanding debts that you have. This will help improve your credit score over time.

In addition, you can consider getting a secured credit card or becoming an authorized user on someone else’s account to start building a positive credit history. By following some of these steps, you can slowly but surely improve your credit score after a consumer proposal. So, check out our list below of some of the best ways of rebuilding your credit score after a consumer proposal!

Check your credit score

You always need to monitor your credit score to know if the credit bureaus are rating you according to what you are doing. This way, you will be able to complain if you are making all your payments on time, but there is no increase in your score. So, be aware of how they are rating your score to you can build credit faster and more effectively.

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Save money

You can start saving money now that you will make only one monthly payment that will consider all your debts with many creditors. Also, the years after filing a consumer proposal are the best ones for you to start thinking about saving money and learning from your previous experiences!

Make your payments on time

This tip may seem very obvious, but it is crucial that you make all your payments on time. This way, you will make sure that your credit score will not decrease. It can be a good idea to get a secured credit card that sends all your monthly payment reports to the credit bureaus. This way, you can make your credit card payments and consumer proposal payments on time and increase your credit!

If you want to learn more about how to increase your credit score, check out our post below on how to use credit cards to build your score!

illustration of a person on top of a credit score meter holding money and a credit card

How to build credit using a credit card

If you need to build credit, using credit cards can be a great option. Check out our post to know how to build credit using a credit card in 4 easy ways!

About the author

Victória Lourenço

Victória Lourenço is part of the finance writer team for The Mister Finance website. She is a translator and copywriter, having worked on finance topics for over four years. She has a goal to keep studying finances to help people learn more about how to use their credit cards, make loans, and use other money-related products in a way that they can find a more meaningful and healthy financial life!

Reviewed by

Aline Barbosa

Senior Editor

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