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Consumer Proposal and credit rating

I was advised that my credit rating upon filing a consumer proposal would be R7. I have been under the Consumer proposal for a year. However, the credit bureau has my rating at R9.

Which rating would be correct?

One Response to “Consumer Proposal and credit rating”

A licensed trustee said...

Your credit rating is set by your creditors (a little self-serving, but that’s how it works). So, when you file a proposal your creditors are supposed to report that fact to the bureau and request an R7 rating for their debt. What often happens is that the debt is misreported by the creditors or they have already reported it as an R9 and don’t request that it be adjusted to reflect the proposal. It is a common problem that people experience when they file.

We offer the following advice to our clients: if the only reason they are filing a proposal to their creditors instead of bankruptcy is because they believe it will look better on their credit burea – they should think again. In practical terms, there is not enough of a difference between the way proposals and/or bankruptcies are reported to justify filing a proposal.

That doesn’t mean you shouldn’t be filing a proposal – far from it. If you have the ability to repay a portion of your debt you should. I am simply suggesting that you should not expect a proposal to be “better” than bankruptcy on your credit bureau.