Building a Credit History
It’s often said that good credit is the key to getting the best mortgage terms.
Good credit habits can really pay off! Your Multi-Prêts broker will work with you to implement the best strategies to help you achieve your financial goals and make your dreams come true.
Build your credit history in 3 steps
Step one | Have a bank account
Open an account at a financial institution, and deposit an amount each month to save for your down payment. This shows you are able to put money aside, an essential skill to paying back a loan.
Step two | Pay on time
Build a healthy credit history starting with paying your bills on time. This includes your rent, utility bills (electricity, heating, telephone, mobile, internet, cable and others). This helps establish that you pay your bills on time. The last 12 months will be scrutinized
Step three | Manage your debts
Demonstrate you can manage your debts. To acheive this, take out a small loan from your bank and prove you can repay it as agreed. Getting a credit card and paying the balance on time will show your ability to manage your debts. Create a traceable footprint that shows you are thorough when it comes to debt repayment.
The sooner you get started, the better your credit history will be.
You want to give some love to your credit rating ?
A good credit rating is essential if you hope to buy a house. It is an indication issued by a credit reporting agency (Equifax of TransUnion) to asses the probability of a person having a delay in his payments.
… and how do you do that, give love to your credit rating?
- Pay your bills before the due date.
- Avoid using more than 70% of your credit card limit.
- No more than 2 credit cards if you’re an individual (4 if you are self-employed).
- Favor credit card emitted by a chartered bank (Visa, MasterCard, American Express).
- Avoid having more than three credit checks per year.
Facts about credit rating…
- The credit rating score is usually from 300 to 900.
- From 680, your rating is considered to be very good. At 750 and above, it is considered excellent.
- A responsible behavior with your credit helps you get a mortgage loan at the best possible terms.
- Remember that lenders asks themselves : why lend thousands of dollars to a person who is struggling to manage a $3 000 credit card?
Broker tips
Of course, you can look for your mortgage on your own! But did you know it could hurt your credit rating? If, for example, you are unable to obtain your financing in the first bank… and the second one… This situation could affect your credit rating because of the multiple credit checks. With a Multi-Prêts mortgage broker, you have access to up to 20 lenders… with just on query!
