Credit building tips

Credit building tips

I am often asked for ways to build your credit if you are new to Canada or just starting out and would like to soon purchase a home of your own. These tips also apply to those who have had some credit issues in the past and need to focus on improving their credit. So here are some tips that I give my clients.

  • Apply for a credit card with at least a $1,500 limit. Use it and make that it is paid on time and in full.
  • Apply for a small personal loan of a similar amount and make sure that your payments are made on time and in full
  • Keep the balances of your existing cards well below their limits.
  • Fixing mistakes on your credit report. Sign up for one of the free credit monitoring services out there and if you discover any problems then report them right away to Equifax or Trans Union to have them corrected.
  • Keep your credit inquiries to a minimum. This is one of the advantages of using a broker as we pull it once and then have access to multiple sources of financing.
  • Contact the credit agencies and make sure that your cellphone and rent are reporting regularly.

Last but not least you should know how your credit score is determined so you have more control of it in the future. Your score is a three digit number ranging from 300-900. The higher the score the better the credit and the lower the score the more of a risk to any potential lenders. AAA Mortgage lenders are typically looking for a score of 680 and up to qualify for the best rates and terms.

  • 35% of your score is based upon your payment history. This is why it is necessary for you to pay your bills on time.
  • 30% of your score is based upon your total debt utilization. The higher your balances are in relation to your limits then the lower your score could be.
  • 15% of your score is based upon your credit history. The longer that you have had good credit then the better chance you have of having an excellent score.
  • 10% of your score is based upon public records. This could be past bankruptcy’s, collection issues or other derogatory public records.
  • 10% of your score is based on recent inquiries. Anytime you apply for credit that request is logged with the credit agencies. The more you keep applying then it could appear that you are in financial distress.

Note if you are new to Canada then remember that it may take a few months before these items start to appear on your credit file. Be patient and follow the steps and soon you will be well on your way to developing and keeping an outstanding credit file.

Today I am thankful for the fellow drivers that waved to me this morning with all of their fingers, the sudden downpour during my workout this morning and a daughter who shares my love for reading.

I look forward to hearing from you in regard to your mortgage needs.


p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2022-3000179) Broker (2022-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).

p.s.s.s You can download my new mortgage app here