What Should I Know About my Credit History When it Comes to Getting a Mortgage?

What is a credit history, credit score, and credit report?

Credit history can help you increase the likelihood of mortgage approval. If you have a good credit score and credit report, then your chances of approval increase. This means a bad credit history isn’t ideal if one of your goals involves purchasing a property. 

Your credit score is a number that informs you about the state of your finances. It also tells you about your past with finances, how consistent you are when it comes to paying bills, as well as your ability to pay off your debts. 

As for your credit report, it’s a document that provides you with a detailed look into your personal financial information, history of employment, and whether or not you make payments on time. In short, a credit report is a summary of your credit history. For instance, if you’ve made a purchase with your credit card, then you have a credit history. The credit history in your report can also encompass information such as when you opened your account, if you’ve ever missed payments, whether or not you go over your credit limit, and more. 

How do I check my credit score?

In order to check your credit score, you should first know that it’s a number that gets calculated based on your credit report information. Credit scores can range from 300 to 900 in Canada, which means that the best score is 900. 

If you wish to know your credit score, then you should connect with Equifax Canada and TransUnion Canada. These are two agencies that deal with credit reporting in the country.  Equifax Canada and TransUnion Canada can provide you with a copy of your credit report and credit score. This information can be either accessed online or via mail.  

How do I improve my credit score?

There are ways to improve or maintain your credit score. For instance, one of the ways to do so is to pay off all of your debts as quickly as you can and ensure your report is error-free. These debts may pertain to, for example, credit card debts, lines of credit, and loans. This can go hand-in-hand with decreasing the number of your credit card applications. 

Another way to maintain a good credit score is to ensure that you pay your bills on time. Make sure to pay your bills in full as well. However, in the scenario that you cannot pay your bills in full, then make sure to pay the required minimum amount.  

Buying a home can be stressful, but you can remove a lot of that stress from the equation if you go into it with good credit.