Your Credit Report
A good credit report or credit score is an important factor in determining whether or not you will be approved for a mortgage. Here is some more information on understanding your credit, maintaining a good credit history and improving your chances of being approved for a mortgage.
What is a Credit Score?
Your credit score is a number that illustrates your financial well being at a specific point in time. If you think back to when you were in school, it’s like your financial report card. It tells the lender how well you pay back the money you’ve borrowed in the past, did you pay it back on time, every month, were you late and how many times, did you pay it back early, and how much other debt you currently have. This is one of the factors that we consider in qualifying you for a mortgage.
How to Check Your Credit Score
To find out you credit score you can contact one of Canada’s two credit reporting agencies: Equifax Canada at www.equifax.ca or TransUnion Canada at www.transunion.ca. You should check your credit report once a year just to make sure there is nothing there that shouldn’t be there. It’s easier to be proactive rather than scrambling last minute while trying to get a mortgage to sort out anything that is incorrect on your credit report.
For a fee, these agencies will provide you with an online copy of your credit score as well as a credit report, which will give you a summary of your credit history, employment history, and personal financial information.
If You Do Not Have a Credit Score
It is important you begin building a credit history as soon as possible. You can start to build one by applying for – and responsibly using – a credit card.
How to Improve Your Credit Score
Demonstrating your ability to manage credit is key to maintaining a good credit score. There are a number of things you can do to improve your credit score:
- Always pay your bills in full and on time. If you cannot pay the full amount, try to pay at least the required minimum shown on your monthly statement.
- Pay off your debts as quickly as possible.
- Never go over the limit on your credit card and try to keep you balances at approximately 50% of the limit.
- Reduce the number of credit card of loan applications you make.
Call us today so we can get you pre-qualified for a mortgage or improve you credit so you can get a mortgage that works for you.