Minimum Credit Score For A Mortgage In Canada on February 10, 2021 If you’re wanting to purchase a house in the future, you’ll need to know what the minimum credit score for a mortgage in Canada is so that you can take the necessary steps to get to that point. If your credit score is at the minimum amount, you typically won’t get the best rates out there for your mortgage There are a number of useful strategies out there that you can take to get your mortgage credit score to a level that will give you those better mortgage rates. Getting your credit score for a mortgage in Canada increased doesn’t have to be one of those things that bring you stress. There are also a couple of different situations that these strategies might be able to assist you in: The first scenario is if you’re wanting to be pre-approved for a mortgage, but your credit score is under a level that doesn’t let you qualify. The second scenario is if you’re working hard to be approved for a mortgage as well as a home equity line of credit. Your lender tells you that your credit score has to be higher than it is to be approved for both things. The third scenario is if you’re discussing your options with a mortgage broker and they are in the process of setting up a mortgage with a B-lender. The mortgage broker states that you’ll have a lower interest rate if you have a credit score of over 680. Homeownership isn’t the only factor that comes into play when it comes to credit scores. If you’re getting your package ready to approach some landlords, your credit report will typically be one of those things included in the package. If your credit score is between 700 and 800, then you’ll have a much better chance of being approved. A low credit score can also affect your ability to get a credit card or a personal line of credit. Many people with low credit scores want to learn how to increase credit score quickly. A lot of people in the market for a house will ask their mortgage broker questions like, “what is a good credit score in Canada for a mortgage?”, or “what’s the credit score needed for a mortgage, to begin with?” If you’re wanting to increase your minimum credit score for a mortgage in Canada, there are some useful tips you’ll need to learn. Make Good Use Of The Optimal Utilization Strategy If you’re wanting to increase your credit score, you need to take a close look at the amount of credit that’s available. This basically means the percentage of the available credit by which the balance is being reported. The percentage utilization is something that can affect your credit score quite a bit. Equifax has said that utilization has about a third of the impact on your credit score. Let’s take a look at a particular example. Say you walked into a store looking for furniture and saw a sign that stated that you won’t have to make payments for a full year. While the end balance on your credit card may be a smaller amount, it could potentially lower your credit score if it’s over the limit on your card. You could also consider making the entire purchase right then and there. Another example is if you currently have two or three different credit cards that all have a credit limit of $10,000. Let’s assume one of the cards has a balance of $9,800 on it and the other credit cards don’t have any balances on them. Something like this easily occurs for people that want the rewards on their other card, so they make the purchases on that card. It could also happen if you agreed to a promotional offer. There’s a good chance that your credit score might be lower if you’ve been using all two or three of the cards at the same time for various things. If multiple credit cards have a balance of $2,000 owing on them, this can raise some red flags. The usage may not be changed much, but utilization of one card isn’t saying that it’s being used the majority of the time. If you’re able to afford to pay the entire balance owing on the card that has the highest balance owing payment, then you might notice a mild credit score increase. Statement Date Strategy This might go without saying, but you should probably just lower the balance owing on your credit cards. If the statement date is approaching, it’s best to keep reminders and to pay off the balances in the right order. You’ll initially want to find your most recent credit card statement and keep track of the exact date when it was printed. The overall balance that was printed on the statement date is the number that will most likely be going to the credit bureau. Credit card statements usually print on the same day of each month, so there’s a high chance that they will be issued on the same day in the following month. Depending on the date of your credit card statement, you’ll need to plan things wisely. Give yourself about a week in advance of the due date so that the online payments will go through in time. If the credit card you’re needing to pay is from your personal bank, then the payments should be expected to go through pretty much instantly or overnight. Pay It Off And Keep Balances Low If the available credit on your card isn’t very high, this is important to pay attention to. The best way to utilize a credit card is to pay the entire balance off every single month before the date that it is due. All credit cards will give you a grace period by which you need to make the monthly payment. There’s really no benefit at all in using the grace period to bide your time in making the monthly payment. Interest rates are pretty low currently, and paying your entire monthly balance is a much better approach to credit card statements. Use Each Of Your Credit Cards And Lines Of Credit Many people will have a credit card that they never care to use. People like certain rewards or promotions they get with a specific credit card, so they don’t bother using the other ones. If you’re wanting to increase your credit score, using all of your cards evenly is a good way to do so. All of your credit cards will be contributing to that little credit score number, so using them each will all benefit you. Your history can have as much as a 15% overall weighting on your credit score. If you haven’t used your credit cards in a while, you might want to consider making a purchase on one and then just going online and making the payment right away. If you’re going to be using this approach for a personal line of credit, you could always just create a small transfer to yourself and then just transfer it right back the next day. If some of your credit cards have just been collecting dust for many years, go to a local gas station and buy a pack of gum or something small and then pay it back immediately. The statement will go by the last time the card has been used and it’ll give you some extra points towards your score. Get Rid Of All Reporting Errors Going back and seeing if there were any errors in the information throughout your credit history might be a useful approach for some people. Let’s take a look at a couple of examples: If you happen to have a few different profiles with the credit bureau and all of the profiles have different information, you might want to consider putting all of that information into one single credit report. Doing something as simple as this could raise your credit score a bit. Something like this typically happens to people that have a confusing name to spell or to those that have recently changed their legal name. Late payments from a relative that might have exactly the same name as you are another thing that could have an impact on your credit score without you even knowing it. If you recently returned something to a cable company such as an internet router, and the company states that it hasn’t been returned, then that will show up as a collection. This could affect your credit score. Say you filled out a consumer proposal and every single debt that was listed in the proposal should be displaying a balance of zero but are showing up with an “R9” rating. The R9 rating means that the account has been flagged for collections. If you’re wanting to get your minimum credit score for a mortgage higher, you should also look into seeing if the late payments were stated in error. Equifax has said that late payments have as much as a 35% weighing on your credit score. If you want to speed up the process of getting an investigation done with Equifax, your mortgage broker can help with that. An investigation will typically take around two months, but a mortgage broker could get it all finished within a couple of days. Final Thoughts Knowing your credit score to get a mortgage is always a good thing to keep in mind. Even though a lot of these tips are pretty basic, they are useful things that will all contribute to your credit score increasing over time. If you’re only seeking how to adjust your interest expenses, then that’s a completely different thing altogether. Now that you know what credit score is needed for a house in Canada, you can make use of the tips in actively increasing that score.