What Everybody Should Know About Credit Scores

by Jay Calafiore

mortgages101Want to determine what kind of mortgage deal you are going to be able to get?

You might be surprised to know that you began this process long before a mortgage loan was even on your radar.

Getting a great deal on a mortgage is not something any broker can just make happen.  The onus is on you to make it a possibility.

And a major factor affecting that possibility is your credit score.

What’s a credit score?

It’s based in large part on your credit history.

Remember your first credit card? Or how about all those late cell phone bills? What about those student loan payments?

These are all factors that contribute to what’s known as your credit history.

It’s your credit history in conjunction with other factors such as your income, assets, and liabilities that will determine who gets a great deal on a mortgage, and who doesn’t.

The first thing any bank or lender will do when you apply to borrow money for your mortgage loan is pull up your credit score.

And unfortunately, a less than stellar credit rating can affect your ability to get the best mortgage rates.

Your credit score, or FICO score, is a number that major credit-rating agencies assign to you based on your credit history.  It can range anywhere from 300 to 900.

Since your credit score is based on your credit history, this signals to lenders that whether you’re a good risk or a bad risk.

At high credit scores (750 and up), lenders offer a quick approval at the best possible rates. This score says the person is reliable and responsible with debt. At lower scores (below 620), you could pay a premium on your borrowing rate and possibly even find it difficult to qualify.

How to Check Your Credit Report and Credit Score

Getting a copy of your credit score is an important part of the mortgage application process.

Even if your not quite ready to apply for a mortgage its a good idea to get your credit report to make sure your personal information is accurate and you haven’t become the victim of identity theft.

You can get your credit report from one of Canada’s three credit reporting agencies but it is strongly recommended that you get a copy from each one as they may not necessarily be the same.

Credit Report

There are multiple ways to get a copy of your credit report from the three credit reporting agencies but mail or internet are the safest.  For regular mail it’s free but for an online request there’s a fee.

Make sure you contact the agency to find out what pieces of identification are required.

Credit Score

The only way to get a copy of your credit score is online through the credit agencies’ websites.  Your credit score comes with a copy of your credit report a few minutes after you make the request.  There is a fee involved.

Canadian Credit Agencies

Here’s who to contact for your credit score and credit report.

Experian Canada Inc.
150 King Street West
Suite 805
P.O. Box 68
Toronto, Ontario
M5H 1J9
Tel. (toll-free): 1-888-826-1718
Fax (toll-free): 1-800-646-5876
Web site: www.experian.ca

Equifax Canada
National Consumer Relations
P.O. box 190, Station Jean-Talon,
Montreal, Quebec  H1S 2Z2
Tel. (toll-free): 1-800-465-7166
Fax: 514-355-8502
Web site: www.equifax.ca

TransUnion Canada

All provinces except Quebec:
Consumer Relations Centre
P.O. Box 338 LCD 1
Hamilton, Ontario  L8L 7W2
Tel. (toll-free): 1-866-525-0262
Fax: 905-527-0401

Quebec Residents:
TransUnion (Echo Group)
1 Place Laval
Suite 370
Laval, Quebec  H7N 1A1
Tel. (toll-free): 1-877-713-3393
Fax: 905-527-0401

Web site: www.transunion.ca

Once you have your credit report you’ll have a better idea of where you stand and how lenders will view your mortgage application.

If your score is not what you hoped it might be and you want to work towards improving it, you have to understand how your score is compiled and target those areas.

The Secret to Improving Your Credit Score

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