What is your credit score?
Credit scores can range
from 300 to 900 and are used by lenders to determine what kind of a risk you
are likely to be as a borrower. Your score is based on several attributes -
Payment
history
The single biggest factor in your credit
score is having a timely bill payment history. Recent late payments are
factored more heavily than old ones so start today and never let a bill get
past due.
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Amounts
owed
Keeping your
accounts near their maximum limit can signal that you don’t manage credit
responsibly, and that you may have trouble making payments in the future.
Length of
credit history
The longer you have had credit in good
standing, the better. Keep your oldest cards; that good history will help you,
and don’t regularly take out new credit accounts.
Pursuit of
new credit
Opening several credit accounts in a short
period of time is a risk factor. How
many enquiries done on your behalf can also have an effect on your score.
Types of credit
A healthy mix of credit i.e. car loan, mortgage and credit card is more positive than a concentration of debt in only credit cards.
A healthy mix of credit i.e. car loan, mortgage and credit card is more positive than a concentration of debt in only credit cards.
With an excellent
credit score (750 and over), lenders will give you a quick mortgage approval at
the best possible rates. This score says you are
reliable and responsible with debt. At a lower score (below 620), you likely won’t
get the best mortgage rates, you may require a larger downpayment, there could
be extra fees, and you may even find it difficult to qualify.
Your credit score
can change from month to month, which means you can boost
your score relatively quickly with
the right credit behaviours. We can review your situation and discuss how your
score will be viewed by lenders and, if necessary, outline your best options
for credit improvement. If you want to get a mortgage while you work on
bettering your score, we can also advise how that may be possible.
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