Alim Charania your mortgage expert | 403.831.7869 | alim@aclendinggroup.com

Protect & Improve Your Credit Score

A healthy credit score will help you get the best mortgage rate possible. With the rise in identity theft, it is common to find errors on your credit report; if mistakes are made, they will show up on your credit report once it is pulled. The government of Canada’s Office of Consumer Affairs (OCA), recommends that you request and review a copy of your credit report from credit-reporting agencies once or twice a year. Canada has two credit reporting agencies, Equifax and TransUnion.

Review Your Report

By tracking and reviewing your credit report at least once a year, you can keep your credit score healthy and free of errors. Some common errors that might appear on your credit report are: debts that are not your own; debts that have been paid in full; incorrect payment history; and someone else’s information on your file. If errors appear on your report they can be corrected by contacting the creditor and providing accurate information to the credit bureau agencies.  

Soft vs Hard Inquiries

When you pull your own credit report it is considered a soft inquiry. A soft inquiry will not show on your credit report and it will not lower your credit rating. Soft inquiries usually come from pre-approvals by credit companies and current creditors checking your file for potential increases to your credit limits. Hard inquiries will have a slight affect on your credit score and remain on your report for two years. Hard inquiries typically come from credit and loan applications.

Keep a Good Score

Your payment history, level of debt, length of credit history, and pursuit of new credit will affect your credit score. Here are a few effective and simple ways to maintain a healthy credit score:

      Pay all of your bills in full and on time;

      Keep your credit card debt under control. Lending agencies and banks always look at the debt you carry. It is recommended to maintain a balance at least 30% below your limit;

      Limit your applications for credit. Only one application per year is free from affecting your rating. The more you pull your credit score the more it will negatively affect your rating;

      Keep old credit accounts open. Creditors like to see that you have established long-term credit;

      Stagger your purchases of large items. Try not to purchase too much at the same time. Sometimes financial institutions will see a flood of purchases as a sign of instability;

      Check for errors with your credit bureau and correct them as soon as possible;

      Pay your traffic tickets, parking tickets, and by-law infractions;

Repair Your Credit

If you need to repair your credit rating, follow the steps above and remember that it’s best to pay what you can and settle debt before it goes to collections. Late payments are better than no payments; just as some money is better than no money. Remember that creditors are often willing to work with their clients and may even remove an occasional late payment if they are notified ahead of time. Although maintaining a healthy credit score can be daunting, AC Lending Group is knowledgeable and willing to work with you today.  

Based on original post courtesy of Jeff Lee

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