How does debt relief affect your credit score?

What is already on your file before you act?

People often delay a decision because they are worried about what acting will do to their credit. By the time that worry sets in, a good deal has usually already happened to the file on its own — missed payments, high utilisation and accounts moving toward collections all get reported regardless of what you choose next.

How do you check what a route would mean for your file?

The order below is the same whichever route you are leaning toward, and it does not cost anything to follow.

How does each route compare on your credit file?

A consumer proposal and a bankruptcy are both public filings and are reported as such. A debt management plan is usually flagged on the accounts it covers, but it is a private arrangement with a counselling agency, not an insolvency filing. A settled account is generally reported as settled for less than the full amount. A consolidation loan appears as a new account plus a hard inquiry.

The table below gives the exact retention figures published by the Financial Consumer Agency of Canada. It does not name any credit-score rating code, because those specific codes could not be verified for this page — if a figure is not below, treat any number you see for it elsewhere as unverified until you confirm it at the source.

How is each route’s provider actually paid?

The way a route's provider is paid is a separate question from how it is reported, but the two often get confused, so it is worth listing plainly: a Licensed Insolvency Trustee's fees for a proposal or a bankruptcy are set by federal regulation and paid from the payments made into the filing. A non-profit credit counselling agency is largely funded by creditor contributions, and a debt management plan may carry a modest administration fee on top of that. A licensed debt-settlement company's fees are capped by provincial law and generally cannot be collected before a settlement is reached. A consolidation loan's cost is simply the interest the lender charges on the new loan.

How long does each entry actually last?

Even within a single route, the exact removal date is not identical everywhere. The clearest example is a first bankruptcy: Equifax and TransUnion both remove it 6 years after discharge, except that TransUnion keeps it one year longer — 7 years after discharge — in Newfoundland and Labrador, Ontario, Prince Edward Island and Quebec. That difference exists because the two bureaus and the provinces have not all aligned their practices the same way.

Rather than memorising a number, ask whichever bureau, trustee or counsellor is involved to confirm the specific date that applies to your file. A period counted from the wrong starting point — discharge date versus filing date, for example — can look wrong even when the underlying rule is being applied correctly.

What already happened before you act?

People often delay because they fear the credit consequence of acting. Missed payments, high utilisation and accounts in collections are already on the file by that point. Doing nothing has a credit consequence too; it just arrives more slowly.

Is there a route with zero effect on your credit?

No. Every route in the table above either creates a new reported entry or continues an existing one, and even the routes that do not involve a third-party filing still leave the account status — paid, late, settled, included in a plan — visible to a bureau. A service describing any of these five as leaving your file entirely as it was is describing something that does not match how any of them is actually reported.

The honest question is not which route avoids the credit file, because none of them does. It is which route you can actually complete, and what specifically will be reported once you do — both of which a trustee or counsellor will answer for free before you commit to anything.