New Changes To Your Credit
Score Are Coming!
Equifax and TransUnion take your debt repayment information/history and produce a credit score for you. This credit score becomes INCREDIBLY important when qualifying for a Mortgage.
In fact, my credit score is THE MOST important factor when qualifying for a Mortgage. If I have any challenges with my income or down payment when applying for a Mortgage, there are usually creative solutions for each scenario.
However, if I have major challenges to credit, this stop’s the Mortgage file dead its’ tracks. Period.
The TWO Most Important Factors To
Your Credit Score (one is changing):
- Re-payment History. My repayment history is THE most important factor in the equation for calculating my credit score. Simply put, I must make my debt payments on time and for at least the minimum required amount. For the love of all things sacred, please take care of this. Please share this information with your friends, family, co-workers and clients.
- Credit Utilization. Credit utilization is the relationship of my credit balance relative to my credit limit. And this factor is now being more influential in my final credit score. For example, if my credit balance is at or near the limit of my credit card, I am more severely penalized for this (high utilization). Meaning my credit score is now calculated lower. If however, my credit balance’s are at or near zero, I am more rewarded for this (low utilization). Meaning, my credit score is calculated higher for this.
Here’s One Credit Hack To Quickly
Increase Your Score – Today!
If your Bank (credit card company) has offered to increase your credit limit – consider taking advantage of agreeing to this change.
Increasing your credit limit is going to increase the spread between your balance and limit – positively effecting your credit score.
The one caveat to this is …please responsibly manage your credit score. For some people, increasing access to credit leads to people expanding their debt. If I have this tendency, I might not want to increase my credit limit :-).
Do I Even Know My Credit Score?
If not, consider pulling your own credit bureau from Equifax here.
Sometimes there is mis-information in my credit history and correcting everything before the crunch time of purchasing/refinancing or renewing my Mortgage is significantly less stressful than not.
According to Equifax, I can pull my own credit bureau for $23.95
What’s Next?
Continue making at least the minimum payment on your outstanding consumer debt. Ideally, focus the majority of your payments towards the highest interest rate debt first.
If you are willing (able?) consider increasing the limit on your credit card to rapidly increase your credit score.
Share this information with someone you care about. Forward this blog post to them, or just mention this to them in conversation.
IF you are refinancing or renewing your Mortgage, check in with me before making your final decisions of where to place your next Mortgage.
I think it’s important you to feel 100% confident in making these rare and large financial decisions. Send me an email (chad@canadamortgagedirect.com) or call me directly 403-809-5447.
Talk soon,
Chad Moore
