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How Credit Scores Affect the Rate You Get

For far too many Canadians, a credit score is some number that seems to move arbitrarily in different directions, impacting their ability to make large purchases or even to find work. It’s important to understand the mechanism behind the importance of your credit rating, in order to work towards improving it if necessary. This should not be a mystery. What many people don’t know is that they have a legal right to view their credit rating, which allows them to take their financial well-being into their own hands.

This can be done simply by requesting the credit rating from one or both of Canada’s big credit reporting agencies, Equifax and Trans Union. It’s highly recommended to request reports from both, as the information may be different on each report. This is because, if there are any defaulted payments or other problems that need to be reported, oftentimes the creditor will only report to one of the big bureaus. So the discrepancy will appear on one report, but not the other. Many times, people with the same name or living in the same town will have their information mixed up, so this should be looked into.

It’s extremely important to the importance of your credit rating to stay up to date with these reports. Many people are shocked to learn how frequently errors occur. Because most repayment systems are automated, it makes sense that there are technical glitches from time to time that can lead to false numbers on your report. When this happens, you need to dispute the report, which is often just a matter of a simple phone call or legal letter explaining where the error is. Reporting these errors will help to clean up your credit rating and increase your physical score.

The information collected on your credit report can stay for years and years at a time, which is another factor that is surprising to some people, and which adds to the importance of your credit rating. If you are thinking of taking out a major loan or negotiating a mortgage in the near future, then it’s well recommended to start paying attention to these small items now, and establish as many good point on your credit report as possible. Unfortunately, creditors will look at these reports, so if they can be bolstered in any way to show that you have been making positive changes in your financial outlook, they can work in your favour rather than against you.

If you find you have bad or no credit at all, there is no need to panic. Taking out one or two small lines of credit and taking care to pay them off constantly and steadily over a period of about a year will help to seriously repair damaged credit, as long as all other outstanding balances are also paid at the same time. Though credit repair can take a bit of time and effort, it is certainly worth it in the long run, because of the importance of your credit rating in making major purchases.

Creditors and mortgage lenders want people to be able to succeed and finance the homes that they are interested in, not out of altruism, but in a business sense. They need your business. This is why, even if your credit is less than perfect, you still definitely have a shot at taking out the loan or mortgage that you need in order to finance your dreams. Undertaking a few simple steps towards credit repair will go a long way into showing them that you are serious about this goal and that you have the willingness to pay off your mortgage in the future.

The first step then in getting a handle of the importance of your credit rating would be to request copies of your credit report from the two agencies in Canada. Then, you may want to seek out the services of a financial representative, who can best advise you as to what can be done to repair your credit. Some people will have good credit and be able to go ahead with the mortgage process, but for most, a little bit of rebuilding and reshaping will be needed. Fortunately, this is not as difficult of a process as one would think.

Current Mortgage Rates

Mortgage Term Rate  
1 year2.89%
2 year2.19%
3 year2.19%
4 year2.79%
5 year2.44%
7 year3.79%
10 year4.39%
ARM2.10%

View All Rates & Conditions

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