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Getting approved for a mortgage relies on three main components:  Income, down payment and CREDIT.

Many people assume they have good credit but don’t actually know why, or how to maintain it.  Your credit history helps lenders determine how risky it would be to give you a mortgage. Therefore, in order to get the best mortgage/rates available it’s imperative to have and maintain great credit


There are 4 main factors used to calculate your credit score:

1)       Payment History

This one is simple, but most often overlooked….. SO PAY YOUR DAMN BILLS ON TIME!!! For example, if you forget to pay your credit card bill (even the minimum payment) this will hurt your credit score and stay on your bureau for years. If you make online payments pay a few days in advance to allow the transaction to be processed. Often people don’t feel like it’s a big deal because it’s a small amount, but a late payment is a late payment.  Whether you forget to pay the $35 min on you visa, or a $3500 payment on your mortgage both mistakes will affect your credit.

2)      Use of available credit

The percentage of available credit you’re using each month affects your score, so it’s better to have two charge cards at 50-per-cent capacity each than one that is maxed out. Try dividing your cards for certain things – one for gas, one for emergencies etc. Also if you have a line of credit or a credit card that you are maxing out, you may want to increase the amount available and not use as much of it (It’s better to have a $5000 balance on a $10,000 max card, then a $4800 balance on a $5000 card.).

3)      Number of inquires

Don’t make a habit of applying for multiple types of credit during the same month or two. If you’re applying for a car loan, credit card, home depot card and a mortgage all this month, the credit reporting agency will think you are in financial trouble and it will hurt your score.

4)      Length of credit history

Many people think because they don’t use credit and pay cash for things they will have good credit… WRONG ANSWER! Having NO credit history is in some cases worse than having bad credit history. It’s important that everyone should have (at a minimum) 2 active credit accounts (credit card, line of credit, car loan, etc) and use them responsibly. In addition to that, if you have a card with a zero balance, you don’t need to close it out. In fact, having that credit available to you and not using it shows your financial strength and will help improve/maintain your score.


Have more questions about credit and how it effects YOU? Feel free to call me directly at 905-541-6961 and let me help.