How to Deal with Bad Credit
Most of us have things in our past that we’d prefer to keep hidden. Bad credit or a rough credit history would rank pretty high on this list. Bad credit or low credit scores can be a major obstacle when applying for a new mortgage or even renewing or refinancing an existing mortgage. Here we show you some ways of crossing this hurdle.
Checking Your Credit Score
The first stage in fixing your bad credit issue is to check your existing credit score. Credit scores are managed by companies called credit bureaus, which receive data from banks, credit card companies and other financial institutions on your transactions. Based on your record of purchases, payments and credit usage they calculate an index that is considered a good indicator of your creditworthiness, which is just a measure of the probability of your paying back any loans that you might take out. The higher the credit score, the better your creditworthiness. The authorized Canadian credit bureaus are Equifax and TransUnion.
A credit score that is lower than 600 indicates that you have bad credit. Anything above 600 is reasonable, while a credit score of 750 or above is excellent
All of this sounds great, but where do you check your credit score? You could check it with the credit bureaus, which provide your credit report for free by mail, otherwise called snail mail. If you do not want to wait the several weeks that this entails, you could run an online check with the credit bureaus, but that would set you back around $15.
If you’re looking for a mortgage though, there’s a superfast, free and much easier way to get insight into your credit standing. Contact us and we’ll provide an instant, 100% free assessment of your mortgage needs, which will include an overview of your credit standing along with some great suggestions on how to get that mortgage you’re looking for.
Fixing Your Credit Score
After the doom, gloom and bean-counter scares around credit scores, some good news – a bad credit score or even a relatively low score is fully fixable. The fix is simple: get some credit, such as a home mortgage, a line of credit or even a credit card, and make sure you pay back anything you’ve borrowed on those regularly. Easier said than done, you say? Read on to gain insight on how to do this painlessly.
If you’re one of those Canadians with a good credit score, can pretty much any Canadian lender would be happy to finance your mortgage, including banks and credit unions. However if your score is anywhere below 600, that represents a bad credit score which needs to be addressed. Even if your credit score is higher than 600 but below about 700, you may still face issues getting a mortgage from banks and credit unions unless you’re able to provide evidence of a steady job with a minimum income level (the required income level would depend on the mortgage amount and some other factors).
As we promised above, there is a simple and painless fix. Mortgage brokers such as Brevity Mortgages have years of experience dealing with credit issues, and have access to a wide range of lenders who are willing to provide mortgages to people with bad credit or low credit scores. In most cases you will be able to get that mortgage as long as you’re able to come up with a down payment and meet a few other, very simple, conditions. Once you secure the mortgage and pay it down as per the set repayment schedule (typically monthly) for several months, your credit score will start improving.
How We Can Help
Brevity Mortgages is a Canadian mortgage broker. Our staff have decades of experience serving the Canadian mortgage market, and we have deep and extensive knowledge and experience of dealing with bad credit and low credit scores, and helping people get affordable mortgages in the face of bad credit. We offer 100% free advice, evaluations and counselling to people looking for mortgages, and actively work with you to resolve your bad credit issues and get you a mortgage that suits your needs and your pocket. Call us today to set up a completely free, no obligations meeting with one of our licenced mortgage specialists.