Credit Score Articles - Krieger & Company

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

Michael Krieger — Thu, 10 Oct 2019 18:53:59 +0000

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 […]

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Rebuilding Credit After a Proposal or Bankruptcy

Michael Krieger — Mon, 04 Apr 2016 18:40:05 +0000

One of the most common concerns from the many individuals who trust us with their financial difficulties is rebuilding credit and re-establishing credit. It’s not that these individuals want to run up credit after declaring bankruptcy or filing a consumer proposal, but they have a real concern over how their decision to tackle their debt will impact their next car purchase, renting their next apartment, obtaining a mortgage renewal, or being able to qualify for a credit card to use for online purchases and travel expenses. The most important thing to remember is that “good credit” only means you can make some minimum payment, but doesn’t show your ability to ever pay that debt off. We talked about this in an earlier blog on how credit scores are only a part of the puzzle. Sometimes, pulling the band-aid off is a needed step to reduce the total amount owed, save paying mounting interest, and get ahead of minimum payments. The first step is putting the past behind you through credit counselling, consumer proposals, or if necessary, bankruptcy. Counselling gives you the tools you need for rebuilding credit Every consumer proposal or bankruptcy includes at least two counselling sessions absolutely free. These counselling sessions are designed to provide the tools needed to avoid future debt problems and to use credit responsibly. Once you feel ready to manage your credit, we talk about what you can do to maximize your credit score, obtain credit and put you on the ideal track to financial recovery. You can have excellent credit within a matter of months or couple of years following a consumer proposal or filing an assignment in bankruptcy if you take the right steps. Rebuilding credit starts with your regular bills With all of your debt wrapped up in a consumer proposal or bankruptcy, paying your monthly bills on time and in full should be much easier and be the priority. Monthly bills such as your cell phone, cable bill, hydro, gas, and your car payment all report to credit reporting agencies like Equifax and TransUnion and will help improve your credit score just by going about your ordinary day. To accelerate the credit rebuilding process, your Trustee will work with you to apply for credit card(s) with the best possible terms- terms that you are understand and terms that you are comfortable with. Your Trustee will also ensure that you understand your obligations and how to best use that credit to rebuild your credit score as quickly as possible. Your Trustee has a network that understands If your needs stem […]

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Credit Score Only Part Of The Puzzle

Michael Krieger — Sat, 09 Jan 2016 23:01:13 +0000

Almost every day an individual struggling with paying their debts responds with the phrase “I have a great credit score” and they are concerned about the impacts that dealing with their debts will have on their credit score. These three digit scores and their underlying ratings are designed to distinguish those who have mediocre credit (and should get higher interest rates and worse terms) from those with great credit (who should get preferred rates and the best possible terms). What your credit score really says What a credit score really tells a lender is not whether you can pay back the debt. It tells them if you can make minimum payments on that debt. Individuals can owe money that they will never be in a position to pay, however because they are making the minimum payment on these debts, an R1 rating of “paid as agreed” means a good credit score. The struggle is that this is only one part of the puzzle. Detailed information on what your credit report means, how to understand it, and what influences you score can be found here. Stop focusing on your credit score alone Dealing with your debts today may have an impact on your credit in the short term (depending on your approach), but you’ll: Be on the road to being debt-free- knowing you will owe nothing after a period of time free up cash in your monthly budget by removing minimum payments that aren’t actually reducing your debt rely less on your credit, making your interest rate and credit score less important stop borrowing from Peter to pay Paul If you’re tired of just maintaining the minimum payments on your debt and never getting ahead or are unhappy with the rate your debt is being paid, contact our office today to address your accumulated debt for good.

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