Credit Score After Consumer Proposal: Month-by-Month...

Your credit score will recover after a consumer proposal. The R7 rating is temporary. It drops off your report 3 years after you complete your proposal or 6 years from filing, whichever comes first. Most people who rebuild deliberately reach 650 or higher within 12-18 months of completion. This timeline shows you what to expect at every stage so you can track your own progress and know you’re on the right path.

Month 1-3: Right After Filing

The first three months are the hardest to watch. Your score drops 150-250 points from its pre-filing level, and your credit report fills with R7 notations on every debt included in the proposal.

Here’s what happens immediately:

• Your Licensed Insolvency Trustee files the proposal with the Office of the Superintendent of Bankruptcy
• Equifax and TransUnion add a public record notation showing an active consumer proposal
• Every trade line included in the proposal gets an individual R7 rating
• Creditors stop reporting those accounts as delinquent (because they’re now part of the proposal)
• Your score lands in the 450-550 range for most people

The drop feels brutal. But here’s what most people don’t realize: 78.4% of Canadian insolvencies are consumer proposals, not bankruptcies. You chose the option that does less damage. An R7 is less severe than the R9 that comes with bankruptcy, and it clears from your report faster.

What you should do right now: Pull both your Equifax and TransUnion reports. Confirm that the proposal is recorded correctly and that included debts are no longer showing as active collections. Errors at this stage are common — creditors sometimes keep reporting missed payments on debts that are already included in your proposal. If you spot errors, dispute them immediately. Use a free credit monitoring service to track changes going forward.

Don’t apply for unsecured credit. You won’t get approved, and each hard inquiry drops your score another 5-10 points for nothing.

Month 4-12: During Your Proposal

Your score stays low during this stretch. The active R7 notation suppresses it regardless of what else is happening on your file. But this is when smart rebuilders start separating themselves from everyone else.

Tamara in Hamilton filed her consumer proposal in January 2025 with $41,000 in credit card debt. Her score at filing was 490. By month 6, she got a secured credit card from Capital One with a $500 deposit. She used it for a $40 monthly streaming subscription and paid the statement in full every time. Her score didn’t move much during the proposal — it sat around 510 — but she was building something more important than a number. She was building months of positive payment history.

Here’s what’s working for you and what’s working against you during this phase:

---

---

The secured card strategy matters more than most people think. When your proposal ends and the R7 suppression lifts, all those months of perfect payment history start pulling your score upward fast. People who wait until after completion to get their first card lose 6-12 months of positive history they could have banked during the proposal.

Two issuers that commonly approve secured cards for people in active consumer proposals: Capital One Secured Mastercard and Home Trust Secured Visa. Both report to Equifax and TransUnion. Both require a cash deposit that becomes your credit limit. Check the full comparison at best secured credit cards in Canada.

Keep every bill current. Phone, internet, insurance — these don’t always report positive history, but a missed payment can trigger a new collection account that adds fresh damage on top of the R7.

Month 13-36: Mid-Proposal

If you’re on a 4 or 5-year proposal, this middle stretch can feel like nothing is happening. Your score stays in the same range. The R7 is still active. You’re making payments but the finish line feels distant.

This is normal. And this is where patience pays off.

Jordan in Kelowna filed a 5-year proposal in 2024 owing $58,000. By month 18, his score was 505 — barely different from month 3. He almost stopped using his secured card because it didn’t seem to matter. His LIT told him to keep going. By the time Jordan completed his proposal 60 months in, he had 42 months of perfect payment history on his secured card. His score jumped from 510 to 635 within five months of completion.

During months 13-36, your job is simple:

• Keep using your secured card with low utilization (under 30%)
• Pay every statement in full and on time
• Monitor your credit reports monthly for errors
• Don’t apply for new credit — you still won’t get approved for anything unsecured
• Continue making your proposal payments on schedule

If you can increase your secured card deposit, consider it. Going from a $500 limit to a $1,000 limit gives you more room to keep utilization low without changing your spending. Some issuers allow top-ups without a new application.

This is also a good time to read up on what comes next. The consumer proposal timeline covers every milestone from filing to discharge, and the guide to rebuilding credit during your proposal has additional strategies for this phase.

Your R7 rating explained. The R7 sits on your report because you’re repaying debts through a formal arrangement rather than on the original terms. It’s not the worst rating — that’s R9, which means bankruptcy or debts written off as uncollectable. Lenders distinguish between R7 and R9. The fact that you’re repaying a portion of your debt matters when they review your file later.

Month 37-60: Final Stretch and Completion

This is where the timeline splits depending on how long your proposal runs.

If your proposal is 3 years: You’re completing right now. The moment your LIT files the Certificate of Full Performance, the clock starts on R7 removal. Your score begins climbing within weeks as the proposal status changes from “active” to “completed.”

If your proposal is 4-5 years: You’re either approaching completion or in the home stretch. Every month closer to completion is a month closer to the score jump that follows.

Here’s what happens at completion:

1. Your LIT files a Certificate of Full Performance with the OSB
2. Equifax and TransUnion update the proposal status from active to completed
3. The R7 suppression effect starts easing — your positive history gets more weight
4. Your score begins climbing, typically 50-100 points in the first 3-6 months

Nadia in Moncton completed her 4-year consumer proposal in March 2026. She had used a Home Trust Secured Visa since month 8 of her proposal — 40 months of on-time payments banked. Within 3 months of completion, her score went from 495 to 590. By month 6, she hit 640. At month 12, she was at 670 and qualified for an unsecured credit card at 19.99% APR.

Compare that with someone who doesn’t start rebuilding during the proposal. Without those 40 months of positive history, the same recovery typically takes 18-24 months instead of 12.

Can you pay off your proposal early? Yes. Lump-sum payoffs are allowed under most consumer proposals. Completing early starts the 3-year R7 countdown sooner. If you get a tax refund, inheritance, or bonus, talk to your LIT about applying it to your proposal balance.

Ready to check where you stand? Pull your free credit report from both Equifax and TransUnion. Confirm your proposal status, check for errors, and make sure your secured card payments are reporting correctly.

After Completion: The R7 Countdown

This is the part everyone wants to understand. Once your proposal is completed, the R7 doesn’t disappear immediately. It sits on your report for a defined period — and then it’s gone.

The FCAC rule: Equifax and TransUnion remove a consumer proposal from your credit report either 3 years after you complete all payments or 6 years after the filing date, whichever comes first.

Here’s how the math works:

---

---

Notice the pattern: for proposals longer than 3 years, the 6-year-from-filing rule usually results in faster removal. For shorter proposals or early payoffs, the 3-years-after-completion rule kicks in.

Equifax vs TransUnion differences. Both bureaus follow the same FCAC guideline, but they don’t always update on the same day. Equifax tends to process removals slightly faster. After your R7 should be gone, check both reports. If one bureau still shows it, file a dispute with that bureau directly. Include your Certificate of Full Performance as proof. They must investigate and respond within 30 days.

What your score looks like during the countdown:

• Months 1-6 after completion: Score climbs to 550-620, depending on how much positive history you built during the proposal
• Months 6-12 after completion: Score reaches 600-660 with continued on-time payments
• Months 12-18 after completion: Score hits 640-680 for people with consistent positive history
• After R7 removal: Score jumps another 20-50 points as the derogatory notation disappears entirely

These aren’t guarantees. They’re ranges based on typical recovery patterns. Your score depends on your full credit file — other trade lines, utilization, inquiries, and any new negative marks.

Once the R7 drops off, your credit report looks like anyone else’s. Lenders reviewing your file see your recent history, not your proposal. This is when mortgage applications become realistic with A-lenders, and unsecured credit products with competitive rates open up.

Your Next Step

You’re either in the middle of a consumer proposal watching the months pass, or you’re planning ahead and want to know what recovery looks like. Either way, the path is the same.

• Get a secured credit card now if you don’t have one — see the best secured cards for Canadians rebuilding credit
• Pull both credit reports and check for errors — here’s how to do it free
• Read the full rebuild guide for the complete strategy — how to rebuild credit after a consumer proposal
• Understand the full process from start to finish — consumer proposal timeline

The R7 falls off. Your score recovers. The people who come out strongest are the ones who started rebuilding before the proposal was even done. You don’t need to wait for permission to begin — start today.

Want to talk to someone about your specific situation? Find a Licensed Insolvency Trustee near you for a free, no-obligation consultation. They can show you exactly where you stand and what your timeline looks like.