With the ever-changing mortgage requirements and rising interest rates, it has never been more important to ensure your credit is in tiptop shape before you head out home and mortgage shopping.
Fewer people are fitting into the traditional banks’ financing boxes as easily as they may have just a year or two ago.
But the good news is, The Mortgage Professionals have access to many more options than the banks alone! We also have excellent relationships with local credit unions and trust companies to ensure you receive the very best mortgage product and rate catered to your unique needs.
Planning empowers you to qualify for the mortgage that will optimize your payments throughout your life as a mortgage holder.
Your first step towards credit awareness and healthiness is to know where you stand. Request a copy of your credit report online from the two Canadian credit-reporting agencies – Equifax Canada and TransUnion Canada – at least once a year, not only to verify that your personal information is up to date, but also to ensure you have not been the victim of identity fraud.
A quick credit fix or a longer repair process?
We can help determine whether your situation can be easily repaired or if you face a longer road to credit recovery. Either way, there are solutions to every scenario.
If you have some equity built up in your home and still have a manageable credit score, for instance, you can often refinance your mortgage and use that money to pay off high-interest credit card debt. By clearing up this debt, you’re freeing up more cash flow each month, and making your debt load more manageable.
If you have repeatedly missed payments on your credit cards or other bills, you may not be in a situation where refinancing or quickly boosting your credit score will be possible.
Depending on the severity of your situation – and the reasons behind your circumstances, including job loss, divorce, illness, and so on – we can help you address the concerns through a variety of means and even refer you to other professionals to get your credit situation back on track.
The key solution is to take action. Your credit situation will not repair itself.
5 steps for a speedy credit score boost
If your credit needs some minor fixes, following are five steps you can take now to quickly elevate your score:
1) Pay down credit cards. The number one way to increase your credit score is to pay down your credit cards so they’re below 70% of your limits. Credit card usage has a more significant impact on credit scores than car loans, lines of credit and so on.
2) Limit credit card use. Racking up a large amount and then paying it off in monthly installments can hurt your credit score. If there’s a balance at the end of the month, this affects your score – credit formulas don’t consider the fact that you paid the balance off the next month.
3) Check credit limits. If your lender is slower at reporting monthly transactions, this can have a significant impact on how other lenders view your file. Ensure everything’s up to date as old bills that have been paid can come back to haunt you.
4) Keep old cards. Older, well established credit is better quality credit. If you’re no longer using your older cards, the issuers may stop updating your accounts. If this happens, the cards can lose their weight in the credit formula and, therefore, may not be as valuable. Use these cards periodically and pay them off.
5) Don’t let mistakes build up. Always dispute any mistakes or situations that may harm your credit score. If, for instance, a cell phone bill is incorrect and the company will not amend it, you can dispute this by making the credit bureau(s) aware of the situation.
Do you have questions concerning your credit situation? We’re always happy to help! Answers are just a call or email away.