N/A instead of a credit score! This is a big buzz kill when you are excitedly getting ready to buy a home! The client informs me that they've have a credit card for the last 5 years. How can this be? Thankfully they have credit. How do we get the credit card to show up on their credit bureau and why does it matter?
Your credit report plays a pivotal role in securing favorable mortgage financing, making it essential to maintain its accuracy and completeness. Lenders rely on this report to assess your creditworthiness, determining whether you qualify for a loan and at what terms. To ensure your credit report is up to date and favorable for mortgage financing, follow these crucial steps.
IF you find yourself actively in the mortgage financing process your mortgage broker can assist you in updating your credit bureau with in 30 days, even sooner depending on the situation. If you are considering purchasing home in the next few months and require mortgage financing consider following the steps below.
Regular Monitoring: Regularly check your credit report from all three major credit bureaus – Equifax, Experian, and TransUnion. Look for inaccuracies, such as incorrect account information, late payments, or fraudulent activities. Disputing and rectifying errors promptly can improve your creditworthiness. Consider signing up for credit alerts and set a reminder to check your credit report semi annually.
Timely Payments: Consistently pay your bills on time. Payment history constitutes a significant portion of your credit score, which greatly influences your mortgage eligibility and interest rates. Even a single missed payment can have a negative impact.
Maintain Low Credit Utilization: Keep your credit card balances low compared to your credit limits. High credit utilization can signal financial stress and negatively affect your credit score. Aim for a utilization rate below 50-30% to demonstrate responsible credit management.
Avoid Opening New Accounts: Limit the number of new credit accounts you open before applying for a mortgage. Each new inquiry can temporarily lower your credit score. Focus on maintaining and managing your existing accounts responsibly.
Plan Ahead: Start preparing your credit well in advance of applying for a mortgage. Positive changes to your credit report, such as clearing debts and improving your score, take time to reflect. Planning ahead can lead to better terms and higher chances of mortgage approval.
In conclusion, a well-maintained credit report is indispensable for securing favorable mortgage financing. By proactively monitoring your credit, making timely payments, and managing your credit utilization, you can improve your creditworthiness and increase your chances of obtaining the mortgage you desire.
Tonia Mercer | The Mortgage Missus Inc.
About the author,
Tonia Mercer is an independent mortgage broker. She has been in the industry for 15 years and in 2021 she launched her own brokerage The Mortgage Missus Inc.
Tonia is passionate about financial education and believes that working with independent experts is the best way to get unbiased, professional advice. She has joined forces with local independent home and auto, financial advisor, legal, appraiser and real estate service providers.
Effectively creating a concierge service for all things financial and real estate.
Connect with her at Tonia@themortgagemissus.ca
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