Credit Score Canada

Learn why your mortgage credit score is so important when buying a home
beacon score alberta canada
Beacon Score

Your mortgage credit score is very important for lenders. Before you apply for a mortgage or begin to shop for a home, you should get a copy of your credit report and know what is on there.

Mortgage Rates

When you see the low mortgage rates in advertisements, they usually only apply to those applicants with the highest mortgage credit scores. Generally, the higher your credit score – the lower your interest rate.

New mortgage rules are now in effect in Canada, making qualifying for a mortgage more difficult. Creditors want to see that you do not have too much debt, and that you are good at making regular payments on time. Having no credit at all is viewed as having bad credit – so it is wise to open some credit or store cards, even if you pay them off each month.

Other factors that can influence your change of getting a mortgage are: your income, other sources of income/assets and the size of your down payment.

Mortgage Reports

Personal information will appear on your credit score, including your name, address, SIN number, date of birth, employment, lines of credit, mortgages, credit cards, auto and student loans and other debts. Your report will also show, for a period of 7 years, any judgments, bankruptcies, foreclosures, collections, etc.

 
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Mortgage Credit Score

Personal information will appear on your credit score, including your name, address, SIN number, date of birth, employment, lines of credit, mortgages, credit cards, auto and student loans and other debts. Your report will also show, for a period of 7 years, any judgments, bankruptcies, foreclosures, collections, etc.

In general, the minimum credit score to qualify for a mortgage in Canada is 500.  Your mortgage score is calculated using 5 different factors, as follows:

Payment history counts for about 35% of your credit score. 

This shows if you regularly paid your bills and if you paid them on time. If you did pay late, they will look to see how late (days, weeks, months) and how often that occurred.  

They will also look at any collections, foreclosures or bankruptcies.

Amounts owed accounts for 30% of your score.  Creditors will look at your total debts, to see how much you owe, to whom and for how long.  Before applying for a mortgage, it is a good idea to pay down credit card debts and to avoid making any large purchases.

The length of your credit history counts for about 15% of your credit score.  A longer length is good because it shows a longer track record.

New credit counts for approximately 10% of your score.  Every time you apply for credit, your credit, your credit report is pulled.  Every time your credit report is pulled, it can damage your score.  So using a mortgage broker instead of applying to a bunch of different lenders yourself will help you keep your credit score intact. (Plus save you time and money!)

The types of credit you use accounts for about 10% of your score.  Having a mix of credit products is better and shows that you can pay revolving credit as well as control the use of available credit.
Call Jim Black and his team to set up a confidential evaluation of your credit report and mortgage needs.  We can help you avoid home buyer pitfalls and qualify for a great rate on a mortgage.



Mortgage Credit Score

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Understanding Your Credit Score

When you deal with Home Loans Alberta, we pull your credit score and help you understand what the numbers mean and how you can improve your score.

In Canada, your credit rating is also called a Beacon score. When you are in the market for a new home, a second home or refinancing, lenders will want to see your credit report. When you shop the loan on your own, each lender will pull a credit report.

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Having a lot of requests for reports in a short amount of time can lower your credit score, since it appears that you are having trouble getting financing.

With Mortgage Loans Alberta, we pull your credit report once and shop it across all lenders. We should be your first call to help you to get a mortgage pre-approval. This way you know how much you can comfortably afford, what to expect for monthly payments and you can shop with confidence.

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