Credit Score Recovery Simulator ("Path to 700+")
Simulate your credit rating trajectory over 12, 24, 36, and 60 months following a Consumer Proposal, Bankruptcy, or unmanaged debt default.
Contrary to popular belief, filing a Consumer Proposal or Bankruptcy does not permanently destroy your credit. By following a structured rebuilding strategy, most Canadians reach a 700+ prime credit score within 36 months of completing a Consumer Proposal.
Credit Score Recovery Simulator ("Path to 700+")
Understanding Canadian Credit Ratings (R1 to R9)
In Canada, credit bureaus like Equifax and TransUnion assign a rating code from 1 to 9 for each account on your credit report. The letter indicates the type of credit (R for revolving, I for installment), while the number reflects payment history.
| Rating Code | Meaning / Payment Status | Impact on Credit Score |
|---|---|---|
| R1 | Paid on time (within 30 days of billing) | Optimal (+700 Score) |
| R2 – R5 | Late payments (30 to 120 days overdue) | Moderate Loss |
| R7 | Consumer Proposal or debt settlement plan | Temporary Drop (Fast Recovery) |
| R9 | Bad debt, assigned to collections, or Bankruptcy | Severe Impact |
The "2 / 2 / 2000" Credit Rebuilding Formula
To achieve a prime credit score after completing a Consumer Proposal or Bankruptcy, Canadian mortgage lenders and prime auto creditors look for a specific credit footprint:
Revolving Accounts
Maintain at least 2 active, reporting credit accounts (e.g., one secured credit card and one credit builder loan).
Years of History
Build 2 consecutive years of flawless, 100% on-time payment history post-discharge or completion.
Combined Limit
Maintain a combined total credit limit of at least $2,000 across your reporting accounts while keeping balances below 10%.
Frequently Asked Questions
Equifax and TransUnion remove a Consumer Proposal notation 3 years after the proposal is fully paid off, or 6 years from the date you filed it—whichever comes first. Paying off your proposal early shortens the time it stays on your report.
Yes. Major Canadian banks (A-lenders) approve CMHC-insured mortgages for applicants who have been discharged for at least 2 years and have established 2 active trade lines with a $2,000 combined limit under the 2/2/2000 rule.
You can apply for a secured credit card immediately after your Consumer Proposal is approved or as soon as you receive your discharge papers in bankruptcy. Opening a secured card early allows positive monthly trade-line reporting to begin right away.
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