Enemies of Good Credit
Good credit is the one critical factor which dictates what mortgage rate you will get from your bank after you pass the mortgage stress test.
While your credit is the foundation of all the credit and loan approvals in Canada, there is no formal training for masses to understand and manage their credit efficiently.
By the end of this blog post you will be able to identify:
- Why you have low credit?
- How should you rectify the issue and resolve it?
- What credit score makes the credit bad or good?
Let’s Start;
1. One of the worst offenders for good credit is your outstanding loan amounts.
To be a winner, LOWER YOUR DEBTS
Try following things:
- Reduce your overall debts. Avoid consumer loans
- Make higher payments and try to pay off the borrowed principal
- Cut down your lifestyle expense and pay off your debts first
Did You Know?
30% of your credit score depends upon your outstanding loan amount!
2. Another offender of good credit is late payments, whether it is your telephone bill or credit card bill.
PAY ON TIME AND EVERY TIME
Try following things:
- Make sure you pay the bills on time and every time. The history of late payments and Delinquencies affect your credit worthiness adversely.
Did You Know?
35% of your score is based upon your payment history?
3. Third one is You, Yourself not being Proactive
CHECK YOUR OWN CREDIT REPORT
Make sure you check your credit report once a year. The best day is your DOB. You can never forget this date and more importantly it is pertinent to you and your financial future.
The earlier you detect the discrepancy with your credit, the faster you can take appropriate measures to eliminate the issue and keep your credit worthiness intact. This has become norm after the EQUIFAX data was leaked and consumer’s related sensitive data was compromised.
Discover More Here…
To avoid knock downs, practice 3 lessons mentioned above and see your credit score going up quickly.
While you are advised to try your best to be proactive with your credit, it is equally helpful to understand how our credit system works and what choices you have. Just so that you know we are different than our neighbors down south.
In Canada we have 2 major credit bureaus:
Canadian credit bureaus think and work differently. Shockingly enough these are private companies and operate under minimal scrutiny. They are not liable for the accuracy of your files.
They can sell your personal details to the customers without confirming the information. Irrespective of the severity of the matter, they respond to consumer complaints on their own terms and leisure.
is, it is a symbiotic relationship between lender and borrower. The concept of credit is designed to safe guard the creditors resources against bad credits.
However, Canadian banks do have to lend money to make money and they rely on Canadian Credit system. They use complex calculations to check borrower’s credit worthiness.
By following 3 most important tips mentioned above, I am confident you can maintain your credit worthiness and can leverage your credit to acquire your home mortgage, which in turn becomes your stepping stone in creating wealth for you and your family.
Score of 670 and up is deemed as Good Credit and many major banks will be happy to entertain your next mortgage application.
Any credit score below 670 is deemed as not good credit. Dont worry, This is not end of the world. You can still get a mortgage however the mortgage rates are slightly higher along with some extra fees.
Click the link ahead to learn how to read your credit report and credit scores properly.
Analyze Your Situation & Get Expert Recommendations
Why you should you go through this 3 step process?
- Establish your CID profile for mortgage approval
- Quickly access right info that is crucial for your mortgage approval
- Mortgage broker’s recommendations on the basis of what your scenario is
Step:1 Tell Us About Your Credit Profile
Select One Option That Best Describes Your Credit
You Selected:
- Looking For
Step: 2 Tell Us About Your Income Profile
Select One Option That Best Describes Your Income
You Selected:
- Looking For
- Credit
Step: 3 Tell Us About Your Down Payment / Equity
Select One Option That Best Describes Your Down payment / Equity
You Selected:
- Looking For
- Credit
- Income
Step: 3 Tell Us About Your Equity
Select One Option That Best Describes Your Equity
You Selected:
- Looking For
- Credit
- Income
Below Are The Choices You Selected So Far
You Selected:
- Looking For:
- Credit:
- Income:
- Down payment / Equity:
If your plan is to get the best mortgage interest rate on your next mortgage, having a good credit is only the way.
It is also note worthy that Equifax has updated their algorithms on how to evaluate a credit however basic principles on maintaining a good credit remains the same.
If you have any credit related questions, feel free to connect with us. We can guide you on how to improve your credit score and work on the inconsistencies you may have on your credit.