Give Yourself Some Credit

Your lender will look at your credit habits when considering your mortgage application. They will assess whether you pay your bills on time or if you tend to max out your credit card. These habits are reflected in your credit rating. In order for your lender to determine your borrowing profile, you’ll need two revolving sources of credit that are each at least two years old.

Worried that some sloppy financial habits might keep you from a great rate or even from getting a mortgage?  Here’s the thing: you can give yourself some credit. This important factor in your mortgage negotiation is entirely within your control. Start developing good credit habits now. It doesn’t have to be a chore.

Good habits can include…

  1. Paying every bill on time. This one habit is your single biggest game-changer.
  2. Not running up your credit cards. Use the 50 per cent rule. If your limit is $5,000, never let the card go higher than $2,500.
  3. Not ever letting any bill go to Collections, even if it’s for a small or disputed amount. This is because it’s hard to erase these black marks on your credit. So, if it has happened, be prepared to explain why, and be sure to fully pay it off and and report it to Equifax.
  4. If you’ve ever been bankrupt or under a consumer proposal, you’re going to have some extra challenges. You’ll need to have been discharged for two full years. Plus, you’ll need to prove that you’ve re-established credit after the discharge, with at least two re-established revolving credit items and a two-year history of satisfactory repayment. Having strong income and down-payment will help.

If you’re wondering how to polish up your credit, get in touch. We can review your situation and give you some tips about how to boost your credit rating. In fact, the sooner you get off on the right path, the better.

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Rasha Ingratta & Mortgage Associates

By Mortgage Intelligence

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