How long does a consumer proposal stay on a credit report? (Updated)

Both Equifax and TransUnion have shortened the time that consumer proposals remain on a credit report and impact a credit score. A consumer proposal will continue to appear for three years after a consumer proposal is fully performed. It will now also be limited to a maximum of six years after the consumer proposal was originally filed. This means that a consumer debtor taking the full five-possible-years to complete their consumer proposal will see the consumer proposal for only one additional year.

This comes as welcome news for Canadians trying to find relief from their debts using a consumer proposal, a government-endorsed arrangement with their creditors. A fresh start, free from debt, is now available even sooner with less impact on their credit.

How long will Equifax show a consumer proposal?

A registered consumer proposal is a legal agreement set up between you and your creditors, in which they agree to allow you to pay off a percentage of your debt. A consumer proposal will be removed from your Equifax credit report 3 years after you’ve paid off all the debts according to the proposal, or 6 years from the date it was filed, whichever comes first.

Equifax Education

How long will Transunion show a consumer proposal?

The consumer proposal and all accounts reported as satisfied through the proposal will be removed from your file three (3) years from the date you satisfied the proposal or (6) years after the date you defaulted on the account, whichever date comes first.

Transunion FAQ

What does this mean for me?

As a result of this change, there is little benefit in completing a consumer proposal in the final two years, at least as it relates to a credit score. Previously, any acceleration of consumer proposal payments would reduce the time the proposal shows on your credit. This is no longer the case. After the maximum of six years, debt included in a consumer proposal and the historical record of the proposal being filed, is purged from the credit bureau. Once purged, it no longer impacts the credit score.

Older information, such as a past proposal or collection activity, has always carried less weight the older it becomes. Something taking place six years ago, while appearing on the report, had only a minor impact on a credit score. Payment history in the past few months or years had a more significant weight on a credit score. This change is for creditors- such as landlords and mortgage companies- who often fail to understand the consumer proposal process. Removing this information from the report sooner leads to fewer questions by future creditors and means providing fewer answers.