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15 Nov

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Your credit score can impact your eligibility for loans or credit cards and the interest rate you’ll have to pay on them. The lower your credit score is, the less likely you are to be approved for a loan, and the higher an interest rate you’ll have to pay on your loan if you are approved.

The good news is that if you have a bad credit score, then you’re not stuck with it forever! These are our top five tips to help you improve your credit score:

  1. Pay your bills on time.
  2. Don’t use all of your total available credit. 
  3. Diversify your credit mix. 
  4. Dispute errors on your credit report.
  5. Open a secured credit card. 

As well, if you’re interested in getting a loan with your new and improved credit score, we’re here for you at Mortgages Mortgages, your Ontario-based mortgage lenders.

Pay Your Bills On Time

Paying your bills on time helps indicate to creditors that you are financially responsible and trustworthy.

Do you have a past-due bill? Pay it off as soon as possible. If you can’t pay it in full, then arrange a payment plan. Keeping your bills paid off will slowly build your credit score, whereas unpaid bills sent to a collection agency will damage your credit score. And you want a good credit score if you’re shopping around for a mortgage with any Ontario-based mortgage lenders.

If you’re not great at remembering when bills are due, then either set up reminders on your phone or digital calendar, or automate your bill payments.

Don’t Use All of Your Total Available Credit

It can be tempting to max out your credit card, but this is a bad idea for two reasons. First, it may be very challenging to pay off your credit card if you max it out. Second, if you use all of the credit available to you, it’ll impact your credit score.

Some easy ways to keep your credit utilization ratio low are:

  • Always pay more than the minimum payment on your credit card.
  • Keep your balance low on your credit card. For example, if your credit card limit is $10,000, try to keep your balance below 30% or $3000.
  • Accept offers to raise your credit limit. An increase in your credit card limit will help decrease your overall credit utilization.

It’s essential to improve your credit score if you’re looking for a loan from a mortgage lender in Ontario.

Diversify Your Credit Mix

Your “credit mix” is the different types of credit accounts that you have. This can include:

  • Credit cards
  • Personal loans
  • Car loans
  • Mortgages

If you don’t have much of a credit history and don’t want to open several credit cards, then taking out and promptly paying back a personal loan is an excellent way to diversify your credit mix and build your credit score.

Both lenders and creditors look favourably at a diverse credit mix because it means that you’re capable of managing more than one type of credit.

These are the most common types of credit accounts:

  • Revolving credit: A revolving loan has a limit associated with it. You can access the credit at any time, but you must pay off a minimum balance each month; for example, a  credit card or a line of credit.
  • Installment credit: This type of loan has regular payments over a fixed time; for example, a car loan.
  • Open status credit: These are ongoing bills, like utility or cell phone bills. They count towards your credit score too!
  • Mortgage loan: If you have a mortgage loan from an Ontario-based mortgage lender, this is also considered when determining your credit score.

Dispute Errors on Your Credit Report

It’s essential to check your credit report at least once a year to ensure there are no errors on it. If you do find a mistake (for example, a credit card listed as unpaid that you did pay off), you must dispute this right away.

Try contacting the financial institution reporting the inaccurate information first. Then, log a formal dispute with the credit bureau if that doesn’t resolve things. This may seem like a lot of hassle, but it’s well worth it to ensure that your credit report is accurate!

Open a Secured Credit Card

A secured credit card is a great way to rebuild your credit or get you started if you have no credit history. With a secured credit card, you make a deposit with a credit card company, which then becomes your credit limit.

For example, if you put down $500, then your credit limit is $500. If you pay your balance off regularly, you may be able to upgrade to an unsecured card after some time. 

So, a secured credit card is a great way to build your credit and make you eligible for a loan from an Ontario-based mortgage lender.

How can Mortgages Mortgages help me with my mortgage?

We are one of Ontario’s premier mortgage lenders. We offer a variety of mortgages, including mortgages for those who are self-employed

We pride ourselves on being a flexible mortgage lender! We know that you shouldn’t be denied a mortgage just because you’re self-employed. When you come to us to be your mortgage lender, we can discuss:

  • What kind of interest rate you’ll have to pay.
  • How big a mortgage you can expect to be approved for.
  • What type of documentation we’ll need to prove your income.

We Want to Be Your Mortgage Lender

Now you know five different ways to improve your credit score. The more actions you can take to improve your credit score, the better a rate you’ll be able to get from your mortgage lender.

At Mortgages Mortgages, we want to be your Ontario mortgage lender. We offer mortgages to people that banks may be reluctant to lend to, such as the self-employed. We offer competitive interest rates to all our clients!

To learn more about how we can help you with a self-employed-based mortgage, call us at 866-417-8805 or contact us online.

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