5 Tips to Fix and Manage Your Credit Score
The credit score is a crucial element to be considered when you are applying for a Canada mortgage. Simply put, a good credit score entitles you to better mortgage rates, while a poor credit translates to a higher rate and larger down payment requirement.
Your credit history is largely affected by your previous payment history, which means that if you have any major defaulting, bankruptcy or foreclosure on your account, you are most likely to have a lower score.
A lot of Canadians think that they can’t apply for a mortgage in case of a poor credit score. However, that is not true. There are certain ways to live with a bad credit and you can always take measures to improve and fix your score, making way for an affordable mortgage plan. Keep reading to find out how:
First things first, go through a copy of your credit report in detail to learn what main defaulting areas you need to work upon. Keep a check on how much you owe and to whom, and then contact all of the lenders individually to work out a payment plan and ease the schedule. Look into your savings and income, and then plan a budget on how you will manage to pay off each of your lenders and get back to a decent credit standing.
2.Get a Secured Credit Card
A secured credit card is one of the best ways to regulate your spending and build up savings. Opting for a new secured credit card presents you with an opportunity to establish a good credit standing anew. This makes you a more credible and bankable borrower in the eyes of any future money lenders, banks or brokers.
3. Plan a Budget
Keeping a check on your spending habits and then planning a budget accordingly presents you with a smart and easy solution to manage your current debts and avoid any similar situations in the future. Participate in the monthly budget like a family and encourage all the members to pitch in and contribute towards the strategy of smart spending and maximum savings. This way, you will steadily get regular on your bills and payments, making it easier for you to build a strong credit in the future.
4.Sign up for a Mortgage through a Reliable Broker
Getting your mortgage through a broker is a particularly smart option when you have a poor credit, as you can get more options and a professional advice from them regarding what rate and plan will work best for you.
Don’t Rush it
It is never a smart decision to go for a mortgage loan immediately after you have faced a foreclosure, short sale or bankruptcy. Start thinking about a second home only when you are ready for it, both mentally and financially. Work on improving your credit for a few months, and then opt for a loan when you have a decent standing in place.
Getting a Canada mortgage in current times when the rates are attractive is a lucrative option at the moment and you can always get your hands on a good deal if you manage your credit and get in touch with a reliable broker today! Good luck!