Your credit score plays a major role in the mortgage process. Banks and lenders will need to see your creditworthiness prior to approving you for a loan. The better your credit score is, the better chance will be at getting favourable terms, including a low mortgage interest rate.
There are five main factors that go into determining your credit score, the five C’s of credit:
Before you fill out a mortgage application, it might be a good idea to request your credit report in order to get a better sense of your creditworthiness. There are two Canadian credit bureaus: Equifax and TransUnion and it’s a good idea to get an update credit report from each, every 6 months. There are also credit monitoring services available, to help keep you informed should something suddenly change with your credit.
Your mortgage broker can also help you to obtain your credit report and advise you on ways to improve your credit score.
There are many ways to get help with understanding your credit report. You can visit the Equifax or TransUnion, and access their online resources for more information. You can also contact the service department of the credit bureau which you pull your credit report from, to go over any specific questions. Part of our mortgage broker service includes a review of your financial situation, so our mortgage team can also pull your credit report for you — and answer all your questions.