By Christopher Robinson - Mortgage Architects Inc.
July 16 2021
Let’s face it, you need very good credit these days to get a mortgage loan in Canada. If you do not, you might still get a mortgage, but it will be costly. If your credit needs repair, here are 5 proven steps to rebuilt it:
Step 1: Check your credit report!
Often credit scores might be affected by inaccurate date. It's important to check your credit regularly and contact the company (Equifax or TransUnion) in order to fix your report. You can get a copy of your credit report on :
Step 2: Apply for a secured credit card.
Secured credit cards are a great way to rebuild credit. You will need to give a small deposit and once your credit improves, the lender will give you the deposit back. You should be able to get one from your local bank or an online company such as capitalone.ca
Step 3: Get a second credit card.
Once you had your first card for a few months (maybe 6) I would go get a second card from a major bank. You need 2 revolving credit sources to have good credit score in Canada and get approved with a major lender. Revolving credit means you pay monthly, and the balances/payments change. You can also apply for an installment loan (car loan) however it will not bring your credit as high as credit cards.
Step 4: Keep making your minimum payments. Never miss a payment.
It's especially important to keep making your payments and never miss one. I would setup an automatic payment with your bank to always make your minimum payments. When you want to pay more to get the balance down, simply make another payment! There are no limits to the number of payments you can make in a month.
Step 5: Raise your limits and keep your balances low.
The last step is to make sure your limits are raised to at least $3000 each card. And make sure your balances are not over 30% of the limit. I know its easier said than done, especially if the market conditions are not good and the economy is down. However, it’s the best and fastest way to rebuild your credit.
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