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Your credit score is important. You have likely been told in the past that your credit can have an impact on a number of things, mostly obtaining financing. If you are interested in buying a new home, you will likely need to obtain a mortgage. Mortgages, like all other loans, require approval. Your credit will play a major role in whether or not you will be approved for a mortgage.

The most important impact your credit will have on obtaining a mortgage is your approval. When approving a mortgage, mortgage lenders will closely examine your past credit history. This history often details when you borrowed money, if that money was repaid, and how quickly it was repaid. You may not have thought about it at the time, but any late loan payments or credit card payments could have a negative impact on your loan approval.

All financial lenders, including mortgage lenders, are cautious when it comes to handing out loans to individuals with less than perfect credit. That is why many do not. If you are interested in applying for a mortgage, you are encouraged to request a copy of your credit report. Once you have a copy of your credit report, you can see for yourself what your mortgage lender will be looking at. If you have any outstanding debts, you are encouraged to take care of them before applying for a mortgage. After paying your debts, you will need to obtain the appropriate receipts or wait until the debt has cleared off of your report.

When it comes to credit and mortgages, there are many individuals who do not know that their credit actually has an effect on their interest rates and down payments. Many financial lenders require a down payment on a mortgage loan or home. This down payment will be set upfront and it will vary. Your credit score will have a large impact on what your down payment will be. In a way, mortgage lenders use a down payment to offer themselves security when it comes to dealing with an individual that has less than perfect credit.

Your credit may also have an impact on the interest that you are being offered. Mortgage lenders are allowed to charge just about any interest rate that they like. This rate is usually within a range of four to ten percent. As with a down payment, many mortgage lenders use an interest rate to offer themselves security. Many individuals, with a poor credit rating, find themselves being charged more interest than someone with a good credit rating.

As previously mentioned, your credit history is something that you can change. With a small amount of time and work, you do not have to let your past mistakes have a negative impact on the buying of a new home. Planning ahead is the best way to prevent your credit affecting your mortgage. Cleaning up your debt before applying for a mortgage will not only help your chances of being approved, but it may also decrease the amount of your down payment or your interest rate.

The following is used to calculate your beacon score:

• Payment history- This indicates if you have made your payments on time
  
• Amount owed - Comparison of what you owe to your credit limits with various lenders


• Length of time - This indicates how long you have had credit accounts


• New Credit - Shows how often you are looking for new credit


• Type of credit - Considers the type of loans you have - car loans, lines of credit, credit card balances

You can get your credit report from one of the two credit Bureaus in Canada

Equifax
Transunion

Once you've got your report click here to get a better understanding of how your credit works.

They charge a small fee, but well worth it to save you frustration down the road. Make sure that your credit report shows what accounts have been closed, what has been paid out and your report is current. After all these things are taken into consideration when you are applying for credit. If you need help understanding your credit report, believe me it is confusing to most at first, contact your local credit counselor and I am sure they would be happy to walk you through it.

What can I do to improve my credit score?

When it comes to bad credit mortgages we offer our clients two options:
1. Assistance with rebuilding and repairing credit in order to qualify for a mortgage with a lower down payment and interest rate >>> within 6 -12 months. (See our Credit Repair Program for more details)

2. Arranging a mortgage through either an alternative mortgage lender or private lender at a higher rate of interest.

To see what you currently qualify for

          Credit Resources      

                                                                                                                                                                              Bad Credit? This will mean higher lender fees and mortgage rates.
Your credit score is an important indicator of your creditworthiness. The higher your score the better chance you have at getting credit extended you. While many lenders use bureau scores to help them make lending decisions, they also take other aspects into consideration. Lenders will use your credit score to determine if you are likely to pay your bills and also help them place you with the appropriate repayment plan. For example if you have claimed bankruptcy in the past they might place you at a significantly higher interest rate.  Visit our Credit Repair Centre for help on repairing or re-establishing your credit.

• Non-Profit Credit Counselling in Canada
   
• Re-establish your credit! Apply for a  Secured VISA Card!

• Reduce your debt and repair your credit by taking the aid from debt consolidation care. By dealing with your creditors and collection agencies we will help you to make your life hassle free. We provide some other services also such as free counselling, debt reduction software, budgeting. Visit us to know more about our services.
   

  If you have a severe financial problem you may find solutions at the following sites:

  BC Bankruptcy Information;

  Alberta Bankruptcy Information;

  Newfoundland Bankruptcy Information;

  Ontario Bankruptcy Information;

  Ontario Bankruptcy Trustees;

  NB & PEI Bankruptcy Information;

  Canadian Law Information;

  Canadian Trustee Websites.