Is your credit score hurting you?

In the latest statistics released by CMHC...the following jumped out to us as a significant fact...


"For transactional homeowner loans, the average credit score for loans insured in the six month period ended June 30, 2014, was 745 while the average gross debt service (GDS) ratio for the same period of time was 25.7%. The high average credit score and average GDS ratio demonstrates a strong ability among home buyers with CMHC-insured mortgages to manage their debts"


This seems to be consistent with industry rumors that CMHC is really focusing on clients with High Credit Scores...picking the lowest risk applications and turning away a high number of clients who are ready to buy, financially, but just do not have a high enough credit Score.


So what does a person do to improve their credit score? Well the first thing to do is to get a copy of your credit report; after all you can’t improve your credit if you don’t know what is wrong.


Take a look at the high credit balances; this is one area where you are really punished. If you are close or over your limits on credit cards, pay them down to about 50% of the limit. Oh, and by the way don’t be late making payments as this also really hurt your credit score.


Stop applying for credit as the credit scoring companies take this as if you are credit hungry, so before calling several banks to find out what they can do for you, make sure they are not pulling your credit. Yes I know that you can do this within 30 day period and it may not affect your credit but many mortgages take longer than 30 days and each time a credit is pulled can hurt your score.


Avoid collections or financial disputes. Sometimes this is difficult, but when disputing a bill, a rental situation, cell phone bill etc., you need to make sure that it will not come back and bite you. Many of these companies will report a collection on your credit report and again this will really hurt your credit score.


These are but a few of the areas you need to mind with respect to your credit so that your credit score does not come back to bite you!

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