Credit Score After Bankruptcy in Canada: The Complete Rebuild Guide
Bankruptcy stays on your Canadian file 6 years after discharge. Here is your concrete step-by-step rebuilding roadmap.
Filing for bankruptcy in Canada is a significant but sometimes necessary financial reset. Understanding exactly how bankruptcy affects your Canadian credit score, how long the negative mark lasts, and what steps you can take immediately to start rebuilding is essential for your financial recovery.
How Long Does Bankruptcy Stay on Your Canadian Credit File?
Bankruptcy Type
Equifax Reporting Period
TransUnion Reporting Period
First bankruptcy
6 years after discharge
6 years after discharge
Second (or subsequent) bankruptcy
14 years after discharge
14 years after discharge
This is one of the key differences between Canada and the US, where Chapter 7 bankruptcy stays on credit for 10 years. Canada's 6-year period for first-time bankruptcies is somewhat shorter, though still significant.
Canadian Bankruptcy Discharge Timeline
First-time bankruptcy with no surplus income: Automatic discharge after 9 months
First-time bankruptcy with surplus income: 21 months
Second-time bankruptcy: 24 months minimum (36 months with surplus income)
After discharge: The 6-year or 14-year reporting clock starts from the discharge date, not the filing date
What Happens to Your Credit Score During Bankruptcy?
During bankruptcy proceedings, your credit score typically drops to the 300-500 range. Most unsecured debts are discharged, but the bankruptcy notation appears on your file. Secured debts (like a car loan or mortgage) are handled differently — you can often keep the secured asset if you reaffirm the debt and maintain payments.
Post-Bankruptcy Recovery Calculator
Bankruptcy falls off:
Estimated score range now:
Estimated time to 600:
Step-by-Step Post-Bankruptcy Rebuilding Plan
Immediately After Discharge
Pull both credit reports: Verify the bankruptcy is recorded correctly and that all discharged debts show $0 balance. Dispute any errors.
Start KOHO Credit Building: The very first month after discharge, start adding positive Equifax data. Every month counts.
Apply for a secured credit card: Home Trust or Refresh Financial are good options — both work with post-bankruptcy clients. Deposit $200-$500, use for one small charge, pay in full monthly.
6-12 Months Post-Discharge
Your score should be creeping up from its post-bankruptcy low (typically 300-450) toward 500-550
Maintain perfect payment record on your rebuilding accounts
Keep utilization on your secured card under 10%
Don't apply for any other credit — avoid unnecessary hard inquiries
12-24 Months Post-Discharge
Score typically reaches 560-620 with consistent positive behaviour
Some secured card providers will upgrade you to unsecured at this point
Consider a credit builder loan at a local credit union for installment diversity
Begin exploring whether you qualify for a car loan or basic unsecured card
3-5 Years Post-Discharge
Score often reaches 650-720 with disciplined habits
Some lenders begin viewing you as a mainstream borrower again
Mortgage options start opening up — particularly with alternative (B) lenders initially
Consumer Proposal vs. Bankruptcy: Credit Impact Comparison
Feature
Bankruptcy (1st)
Consumer Proposal
Credit file notation
6 years after discharge
3 years after completion (max 6 from filing)
Score impact
Severe (300-450 range)
Severe (similar initial drop)
Asset protection
Surrender non-exempt assets
Keep assets; negotiate debt reduction
Rebuilding timeline
Slightly longer due to notation duration
Slightly faster post-completion
Key insight: The bankruptcy notation on your credit file is a permanent feature for 6-14 years, but your score does not stay at the bottom for that entire time. With consistent positive behaviour starting immediately after discharge, most Canadians can reach 600+ within 2 years and 660+ within 3-4 years — while the bankruptcy notation is still on the file. Lenders do look at your pattern of behaviour after bankruptcy, not just the notation itself.
📈 Build Credit While You Spend
KOHO's Credit Building feature reports your monthly payment to Equifax — helping you build a Canadian credit history without a credit card. Starting at $7/month or free with KOHO Extra.