What happens to your credit rating?

Although we all value a good credit rating, if your debt has become unmanageable then your credit rating will suffer whatever you choose to do.

1. If  your credit accounts become delinquent then your rating will deteriorate as your creditors report this to the Credit Bureau.
2. If you file a Consumer Proposal then this appears automatically in your credit report and remains there for 3 years following successful completion.
3. In the case of an assignment in bankruptcy then the information remains on your report for 6 years after your discharge.

The practical implications of having insolvency information on your credit file is widely misunderstood. The popular myth is that a bankruptcy completely removes access to credit for seven years. This is not the case. There are lenders prepared to grant credit to bankrupts immediately on discharge. There are lenders who will never extend credit to a discharged bankrupt regardless of the time that has passed. The reality is that your access to credit rebuilds gradually over time.

The major benefit of a good credit rating is that credit becomes easier to get. If your current debt is unmanageable then a good credit rating can only help you make your situation worse.