Simple Ways to Rebuild Your Credit After a Consumer Proposal

September 8, 2022

By Loans Canada

Have you recently filed for a consumer proposal and you’re looking to rebuild your credit? In this article we’ll look at what is a consumer proposal and simple ways to rebuild your credit later.

What is a Consumer Proposal?

A consumer proposal is an agreement that you make with your creditors to settle debts that you have owing. Through the assistance of a licensed insolvency trustee, you can file a consumer proposal. In fact, insolvency trustees are the only ones who can help you. You’re not able to file a consumer proposal on your own without one.

The trustee acts as your representative for you with your creditors. Your trustee negotiates with your creditors, with the goal of coming to an agreement and settling your debts owing. The trustee tries to please all sides and come up with an arrangement where everyone is happy. The creditors are happy because they are being paid, while you’re happy because you’re able to settle your debts for less than you otherwise would have.

Bankruptcy vs. Consumer Proposal

Although both terms are used interchangeably, a bankruptcy and consumer proposal are different. A bankruptcy and consumer proposal both offer you a fresh start with your finances. However, the consequences of a bankruptcy are a lot more long lasting.

With a bankruptcy, it stays on your credit report for about seven years. This is seven years after it is discharged. This means that it can affect your credit for many, many years.

A consumer proposal meanwhile may only stay on your credit report for three years. That means you are typically able to build your credit a lot faster than you would with a bankruptcy.

Now that you understand the difference between the two, let’s look at ways to rebuild your credit faster after a consumer proposal.

Secured Credit Cards

The first way to build your credit faster after a consumer proposal is by taking out a secured credit card.

A secured credit card is just like a regular one, except with a key difference. You’re required to make a deposit in order to get a credit limit. This gives the credit card issuer added reassurance that you’ll repay any balance owing.


Contrary to popular belief, it’s still possible to get a mortgage if you’ve filed for a consumer proposal. A mortgage represents a lot of money. As such, mortgage lenders want proof that you’ll be a responsible borrower after filing for a consumer proposal.

Before you apply for a mortgage, you’ll want to reestablish your credit. The simplest way is by signing up for at least two credit cards and not missing any payments on either for at least two years. When you do that, lenders are a lot more open to giving you a second chance.

About the Author

Sean Cooper is the bestselling author of the book, Burn Your Mortgage: The Simple, Powerful Path to Financial Freedom for Canadians. He bought his first house when he was only 27 in Toronto and paid off his mortgage in just 3 years by age 30. An in-demand Personal Finance Journalist, Money Coach and Speaker, his articles and blogs have been featured in publications such as the Toronto Star, Globe and Mail, Financial Post and MoneySense. Connect with Sean on LinkedInTwitterFacebook and Instagram.

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