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When you apply for a mortgage, the two most important questions to start with are: Do you have good credit? And can you afford it?  Working with "yes" clients to both questions are ideal, but not always possible.  But can you get a mortgage with "bad credit"? And what does it take to bring up your score?

As always, there is not one answer that fits all to any of these questions. There are any number of variables that impact your life, and credit score. The best way to figure out your game plan, is to start with pulling your credit score.

Seeing the number on the scale, is only one factor.  When your broker, who's educated in how the system works, can review the numbers in side this paperwork, the story becomes clearer.  

Some snags that may be hindering your score are:

  • No revolving credit.  This would be a credit card which is paid off regularly and held under your own name. Lack of revolving credit could lead to no score at all
  • Overdrawn credit card limits. If your limit is $1000 and you have overextended the balance, or are near the $1000 limit, this will bring your score down
  • Overdue payments (30 + days past due)
  • Paid off balances still showing up on your credit score.  Mistakes can be made, and if there is a loan, or credit card which has been closed, but still showing as open. This will affect your credit score as well as your total debt ratio
  • Other issues affecting the score would be previous Bankruptcies and Consumer Proposals

It's not actually a very complicated system.  But it certainly isn't one in which most, or any consumers are able to fend for themselves.  We have been able to assist clients in many different situations.  We have seen that there is a big advantage in working with a mortgage broker in ANY credit score situation, but ESPECIALLY in situations which require a bit more knowledge and understanding in reading and improving credit scores.

So what CAN you do?

  • Carry a small balance credit card that is paid off monthly
  • Make sure to stay far below your credit limit
  • Pay your bills on time.  If you are not paying them in full, make sure to make the minimum payments within 30 + days of the due date.
  • Have your broker verify that any open lines of credit showing on your score, are valid
  • Educate yourself on how the Bankruptcy or Consumer Proposal will affect you.  Each will have a large impact on your future, and it is important to get a second opinion if you are thinking of doing either action.

These can be difficult conversations to have, and the process will take some time. However, with patience, and trust, we can work with you to get you to where you need to be.