If you don’t already know, a good Credit Score is imperative to buying a home. If this is YOUR year to get a mortgage and buy a home then this will be very important information for you.
According to PropertyWire.ca:
“With more Canadians living closer to the edge than ever before, what better time than now to tackle the topic of credit scores and ratings and how you can help your clients improve theirs.”
As a “housing professional” I am educated on how to help you improve your credit score, so that you will be able to get into either your first home, or the home of your dreams … faster!
“By helping your clients see the light under their pile of debt, you’ll be viewed as an even more valuable connection than you already are and that, of course, bodes well for the future of your business.”
It is important to consider your credit score well in advance (at least a year) of beginning to even look for a home, in case that score needs to be improved upon. Keep in mind, there is also a great deal of half-truths, myths and misinformation to research. Your mortgage professional should be able to debunk those myths.
“Your credit score is a huge, huge item,” says Putnam.”
Let’s start at the beginning. Why is it so important to have a good credit score?
“Credit scores are determined by using a complex formula and rating scale, says Penney. Credit rating agencies look at your income, your debt repayment history, your total approved credit limits, your credit usage levels and more and that information is crunched into a scoring system that assigns a number of between 300 and 900. This is known as your FICO score. The higher you are on the scale, the less risky you are to a lender.”
Most mortgage professionals and credit experts recommend getting a sneak peek at your credit rating once a year or perhaps every two years. The main reasons for this are:
- to ensure that the information the credit bureau has is accurate and
- to make sure you’re not the victim of fraud
“Because we love to borrow money, that means almost every adult Canadian has a credit file,” explains Putnam. “More than 21 million of us have credit reports. And most of us have no idea what’s in them. Are there mistakes? Have you been denied credit and don’t know why? Is someone trying to steal your identity? A simple check of your credit report will probably answer all those questions.”
“The riskier it is for the lender, the harder it will be for you to obtain a mortgage.“
Also, know that your credit is negatively affected every time you get your credit checked. ”Your score may decrease by a couple points every time you authorize an inquiry.”
“This is a major benefit of using a mortgage broker rather than shopping for a mortgage on your own,” he says. “A mortgage broker is able to pull a credit report once and use this report to find you the best product.”
When it is YOUR time to get your things in order to get your mortgage, please don’t hesitate to call me. I will go through all of the credit scores issues with you, and we will, together, find a great fit for you and your budget!