In this guide
What does an R7 rating mean?
Canadian credit bureaus assign a rating to each credit account on a scale from 1 to 9. Revolving accounts, such as credit cards, show as R7.
R1 means you pay on time. R9 is the bottom of the scale, used for bankruptcy and debts the lender has written off.
| Rating | Meaning |
|---|---|
| R1 | Paying as agreed |
| R7 | Consumer proposal or debt management plan |
| R9 | Bankruptcy or bad debt written off |
Source: Equifax Canada – Consumer Credit Report User Guide
An R7 status indicates that you are making regular payments under a special arrangement to settle your debts, which is essentially what a consumer proposal is. A lender reviewing your file will see that you experienced financial difficulties but chose to address them through a formal repayment plan instead of ignoring the situation.
The R7 applies to each debt included in your proposal. The proposal itself also appears in the public records section of your report.
How long does a consumer proposal stay on your credit report?
A consumer proposal will appear on your Equifax credit report for three years after you complete it or for six years from the date you filed, depending on which happens first.
Source: Equifax Canada – How Long Does Information Stay on My Credit Report?
TransUnion is slightly different. A consumer proposal and the accounts settled through it will be removed three years after the proposal is satisfied, or six years after the account defaulted, whichever comes first.
Source: TransUnion Canada – Frequently Asked Credit Questions
| Bureau | When the consumer proposal is removed |
|---|---|
| Equifax | Three years after all proposal debts are paid or six years from the filing date (whichever comes first) |
| TransUnion | Three years from the date the proposal is satisfied, or six years from the account default date (whichever comes first) |
For example, if you sign in March 2024 and complete it two years later, in March 2026, the proposal will be removed from your Equifax credit report in March 2029, three years after your final payment. The faster you pay off the consumer proposal, the sooner the record will be removed.
What if your credit is already bad?
If a consumer proposal is being considered, the damage probably started long ago.
Missed payments stay on your Equifax report for roughly six years, as do accounts that have been sent to collections. Falling behind each month adds negative information to your credit report.
Source: Equifax Canada – How Long Does Information Stay on My Credit Report?
A consumer proposal puts a stop to this. Interest is frozen, collection action stops, and it prevents further missed payments from impacting your credit report.
How to rebuild credit during and after a consumer proposal
You don’t have to wait for your consumer proposal to be removed from your credit report to start rebuilding your credit. However, the payments you make to your trustee won’t help with this process, as they are not reported to credit bureaus as new credit activity.
A secured credit card addresses this issue. You put down a deposit, and the card reports to the credit bureaus like any other card. Paying the balance in full each month helps build a positive credit history.
Keep any accounts not included in the consumer proposal in good standing, as one clean, current account carries real weight with lenders. Pay your phone bill, rent and utilities on time.
Be sure to check your credit report with both Equifax and TransUnion for errors and dispute any errors.
Consumer proposal vs bankruptcy on your credit report
A consumer proposal is recorded as an R7, while bankruptcy is an R9, the lowest rating. A first bankruptcy stays on your Equifax report for six years after discharge. Lenders see an R7 as someone who repaid part of their debt and an R9 as someone who wasn’t able to repay anything.
In the 12 months ending March 31, 2026, 78.5% of consumer insolvencies in Canada were proposals rather than bankruptcies.
Source: Office of the Superintendent of Bankruptcy Canada – Insolvency Statistics in Canada, March 2026
The credit impact is just one factor in your decision. Our consumer proposal vs bankruptcy comparison includes how much each costs, how long it takes and how it affects your assets. Also take a look at how bankruptcy affects your credit.
Can you get a mortgage with an R7 rating?
An R7 status can make getting a mortgage more difficult but not impossible. While prime lenders and major banks usually reject new mortgage applications during this time, B-lenders and private lenders may still consider you, often with higher rates and larger down payments.
Renewing an existing mortgage is a different process. Since a renewal isn’t considered a new application, your current lender cannot require you to requalify solely because your credit score has dropped.
Keep the mortgage up to date, and a straightforward renewal typically goes through. Switching to a new lender is where complications arise, as it requires requalifying from scratch. Therefore, most people choose to stay with their current lender until the consumer proposal is completed.
Frequently asked questions
Does a consumer proposal ruin your credit?
No. It temporarily lowers your credit rating to R7, but then it is removed. For many, their score was already falling before filing, and the proposal prevents further damage.
What will my credit score be after filing?
There’s no fixed number. The drop depends on where your score started, and someone already carrying missed payments and collections falls less far than someone with a clean file. Anyone promising your score will move by a set number of points is selling something.
Can I get a credit card during a consumer proposal?
Yes, you can get a secured credit card during a consumer proposal. You make a deposit, and the card reports to the credit bureaus like any other, so on-time payments build positive history while your consumer proposal is still active.
Will lenders see the consumer proposal after it’s removed?
No. Once Equifax and TransUnion remove it, the consumer proposal and the accounts settled through it will no longer appear on the reports that lenders check.
Can an employer see your consumer proposal?
Typically, no. It only appears in credit checks, usually required for finance jobs or positions involving money management. Most employers do not check this information.
Will a consumer proposal stop you renting?
Although an R7 may appear on a landlord’s credit check, a strong rental history and reliable proof of income typically carry more importance than an R7.
Is an R7 worse than an R9?
No, an R9 is worse. R9 is the lowest credit rating on the scale and marks bankruptcy or written-off debt, while R7 marks a formal repayment arrangement you’re actually paying.
Do I need to tell the credit bureaus when my proposal is done?
Your trustee files the completion paperwork, but check both reports a few months later just in case. If the consumer proposal is still showing past its removal date, dispute it with your Certificate of Full Performance as proof.
Find out what a consumer proposal would mean for your credit
A free consultation with a Licensed Insolvency Trustee shows you exactly how your credit would be affected. Take the twenty second quiz to get started.
