What is a credit score and why is it important?
What do you need to know about credit when getting a mortgage? A credit score is a scoring system based on your history with credit that summarizes your ability to repay debt. This score is used in part to help determine what you can borrow when you apply for more credit. A potential borrowers credit score is very important when applying for financing because a lender will use this number when evaluating your ability to borrow.
What does a mortgage broker or mortgage lender look for on a credit bureau?
We are looking for consistent positive repayment history across multiple credit trades over at least a few years. We want to see a good history established proving that you make your payments on time as agreed. If you are over 30 days late on a payment it will reflect on your credit bureau. If you are consistently late on your credit repayments this can be very damaging to your credit. A borrower also needs to make sure they have at least 2 trades established for at least 2 years. This could include, credit cards, loans, lines of credit, phone bills etc. These are helpful pieces of information about to know about credit when getting a mortgage.
How can I make sure my Credit is strong?
There are a few things borrowers can do to ensure their credit stays as good as possible. The most important is to make sure all bills are always paid on time. Keep credit cards or lines of credit at less than 50% of their total limits. Even if you dont use credit it is a good idea to get a credit card. You can use it and pay it off right away but this will help build your credit score. It is a good idea to keep tabs on your credit. If anything is showing on your credit bureau that should not be there you can take action right away so it doesnt damage your credit position. Visit equifax.com to learn more about your credit and how to keep an eye on it!
We want our clients to succeed. Sometimes a clients credit is not in a position where they are ready to buy a home. This is okay! We can look at your credit and help you come up with a plan that will help you realize your dreams of homeownership.
-Jessica Kriekle
