If you are applying for a mortgage or any other type of credit, a lender will always want to see your credit score. Having a strong credit score is so important to a mortgage application. When I sit down with clients and it comes to checking credit, there is often a sense of uneasiness because people simply don’t understand what is contained in a credit report. Here is a little breakdown to help you understand what a credit bureau is.
In Canada there are two major credit reporting agencies, Equifax and TransUnion. It is their role to gather a financial history about you that includes information about your credit and bank accounts, public records that reveal bankruptcies or court judgments, and any debt that went to a collection agency.
This information is used to generate a score between 300 and 900 which lenders then use to determine whether or not to extend credit to you. The higher your score the lower your risk.
Its a good idea to check your credit score at least once a year to ensure that your information is correct because mistakes do happen and it can be difficult to have them corrected. You can visit Equifax.ca or TransUnion.ca to learn more. If you are thinking of applying for a mortgage in the next 12 months and you are concerned about your credit score give me a call to discuss and we can look at your credit together to determine how to improve your score.