Your Credit Score and your Credit Report
Your annual credit report is a key factor in being approved for a mortgage. It shows your history of bill payments and whether they were on time or not. Your credit score (Beacon score) on the other hand is a number between 300 and 900. The higher it is the better.
Canada has 2 major credit bureaus:
Trans Union (1-800-663-9980)
You can obtain your free annual credit report from each of these bureaus by mail or on line for a small fee if it includes your score.
Is your credit score low? Fix it:
- Play catch-up with any missed payments
- Make your credit card payments on time every month
- Focus on paying down your credit card balances
- Borrow the amount of money you can afford to repay
- Do not apply for new loans or credit cards. When these companies conduct an inquiry about you, this can lower your score.
- Keep your balance on your cards below 33% of your limit, if you can
- The lower your balance on your cards, the higher your score
- If your lender lowers your available credit, this may affect your score
- The older your account is, the better your score
- Do not close unused accounts. This may lower your credit score because it erases any previous credit history with that account.
People with a lower credit score may end up being denied mortgages from the major financial institutions like the banks, or may end up paying higher interest rates. Keep your credit clean.