SOME THOUGHTS ON CREDIT

General Kevin Ovelson 23 Mar

Like it or not we are living in a world of tighter mortgage guidelines (B20) and stress tests. Having a strong credit score is more important than ever before. Your score directly affects which lenders will be willing to work with you and what products and pricing you will be able to apply for.

Obviously, there are several factors for example: employment history, income level and type of property to name but a few. If your score is low your options are greatly reduced before we even begin.

Many people believe that they have a credit score but have little idea of how or why it got there. I’ve heard these many times, “I’m sure my credit is perfect because I never use it.” or “I’ve never had the need for credit cards, so my score must great!” The reality is that to have a credit score you need to first have some forms of credit and then use them responsibly.

So, how can you make sure you have a great credit score? Here are some tips to get you started.

  • You need must have credit. It may be surprising – but your credit score goes up as more credit is available to you (to a point). We recommend to minimally try the 3 – two’s approach: 2 lines of credit with at least 2 years of history and a minimum limit of $2,000 per line.
  • You must also pay your bills when they are due. That goes for your internet, cell phone and even parking tickets as these will be reflected on your credit bureau.
  • It also helps to start as soon as possible. The longer you have a clean record of paying your credit cards, loans or other credit facilities, the better your credit becomes.
  • Finally, make sure to carry a low balance. One of the least known ways to hurt your credit is to have high utilization, rule of thumb, keep the balances below 50% of the limit.

Can I help you with your credit? If you ever have any questions of concerns about this, do not ever hesitate to contact a mortgage professional (preferably me 😊) about your mortgage related needs.