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3 Ways to Boost Your Credit Rating During Consumer Proposal

Most people know that a good credit score is important. A good credit score enables you to qualify for bank loans, credit cards, make large purchases – and even tap into optimal interest rates or, in some cases, secure a job. It’s critical for your financial health and helps you achieve life goals.

But what about for individuals who are in a consumer proposal?

If you’re in a consumer proposal, you might feel worried about your financial future. More importantly, you might be asking yourself: Is it possible to boost my credit score right now?

The answer is yes, and you can begin working on this today. I’ll explain how, but first, let’s briefly review what a consumer proposal is.

The Consumer Proposal, in Review

A consumer proposal is a debt relief program created by the Government of Canada that allows individuals to regain financial stability and avoid bankruptcy. Those pursuing this option connect with a Licensed Insolvency Trustee (LIT) who proposes to creditors a recommended percentage of the debt to be paid. Once a formal agreement is reached with creditors, you’re required to make monthly payments over a period of time (normally 5 years).  

Those in consumer proposal can retain their assets and get relief from collection agencies and escalating interest rates and penalties. After completion of the program, individuals are considered to be clear of their debt.  

A consumer proposal is a great option available to those facing financial hardship and who are burdened by debt loads. But, as mentioned above, it doesn’t help your short-term credit rating.

So, what can you do about it?

First, you can take some comfort in the fact that your debts are marked as “7”, the code for “settled”, rather than “9”, the code for bankruptcy – or at least they should be.

There are additional ways, however, to take action immediately to improve your credit score. Below are three ways you can get going on this right away.

How to Improve Your Credit Score While in a Consumer Proposal

1. Monitor Your Credit Score and Make Payments

A simple and free (or low-cost) way to improve your credit score is to begin regularly monitoring it. If you’re not already familiar with what makes up a credit score, you can get a quick primer here.

Regularly monitoring your credit score provides you with an overall picture of your financial health and the opportunity to identify upward and downward fluctuations in your score. It also allows you to spot and address any errors or mistakes that may be negatively affecting your score. Errors do happen from time to time and this is probably not what you need right now. If you think you’ve detected an error or issue, you can report it to Equifax or TransUnion, Canada’s two credit bureaus.

You can also request a free copy of your credit report from Equifax and TransUnion once per year or you can pay a small fee to receive your credit score. A few Canadian companies, such as Mogo, Credit Karma, and Borrowell provide you with free monthly updates on your credit score and rating.

It’s also very beneficial to keep on top of your monthly bill payments, in addition to your consumer proposal payments. Your proposal should have taken into account your overall spending patterns and financial obligations. Making regular payments will improve your credit score in the short- and long-term and these improvements provide some added motivation.

2. Research Your Credit Options

It’s very difficult for those in consumer proposal to qualify for loans and credit cards due to their credit score. That makes it more challenging to rebuild their credit score because it takes credit to build credit.

Individuals in this situation have a few options to consider. If you’re looking to add a revolving credit product (marked “R” on your credit report), you can apply for a secured credit card to make purchases and improve your credit. A secured credit card requires a security deposit, an amount which becomes the credit limit and is held by the issuing financial institution. It’s easy to get approved, although candidates are normally required to have an income source. Those applying during consumer proposal need a letter from their trustee demonstrating that their proposal has been approved and is in good standing.

Although the allowable credit limits for secured credit cards can range from around $500 to $10,000, most applicants are approved for a small amount of around $1,000. Keep in mind that there is usually a set-up and monthly fee and that interest rates can often be a bit higher than other credit cards.

In any case, a secured credit card may be a good option to pursue if your opportunities for getting and building credit are limited. If you keep your account in good standing, it demonstrates a responsible use of credit.

If you want to add an installment credit product (marked “I” on your credit report), Climb offers the most flexibility and most competitive pricing of any product designed specifically for Canadians in consumer proposal with our Accelerator Plan. There’s no upfront fee and you can customize the amount you’re saving based on your budget, with plans as low as $7/week. Learn more about it here.

3. Make a Plan

No matter which credit building options you choose, and when you choose to get started, one thing will always be true: credit scores can’t be fixed in a day. Your credit score is built month over month and year over year, as you show consistent credit repayment (often with an installment product like our Accelerator Plan) and responsible credit usage (often with a secured credit card).

By making a realistic plan based on your budget and lifestyle, you can not only get back to where your credit score was before your consumer proposal, but you can even improve your score.

It just takes time and a reliable payment history reported regularly to the credit bureaus.


Though it can be stressful to see your credit score drop while in consumer proposal, there are actions you can take to begin to repair it today. By understanding your options and taking proactive measures, you’ll be well on your way to a brighter financial future.

If you have any questions about your options, don’t hesitate to reach out to our team at Climb today.

Author: Ryan Watt, CEO

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