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It can be maddening when you go into your bank, or speak with your mortgage broker and find out that something is on your credit report that you did not anticipate. Perhaps you thought a bill was paid years ago, but it wasn’t. Or perhaps a creditor put you into the collection, and you were not aware of it. In either case, the result will be that you could be turned down for your British Columbia mortgage, or you may receive a mortgage, but with a much higher interest rate.
With a credit report, the Equifax computer generates a score based solely on your credit history. The scores usually range between 400 to 900. You’ll sometimes hear this referred to as a BEACON score. The higher the score, the less likely you are to default on the proposed loan payments.. Bankers and lenders usually have no problem lending to you if your score is 680 and above.
Your score is lowered by slow payments, credit cards at or near their limit, and the number of recent inquiries into your credit history. If you are applying for a debt consolidation loan, make sure that you understand that having many lenders checking your credit while you are “shopping” for the best mortgage rate can negatively affect your credit if not done correctly.
If you have equity in your property, a home loan can be your safety net when things go financially wrong in your life. So make sure that your credit rating is in good shape so that you can take advantage of the equity in your home at a good interest rate |