There is a lot of mis-information floating around about credit bureaus, credit reports and credit scores – not only that, but a large amount of the clients I work with have never even seen their credit report or score before! When you meet with me, I will go over the details of credit reports and also your own personal credit report with a fine-tooth comb, making sure you are fully aware of everything affecting your credit score.
I’d like to shed a bit of light, as they say, on the importance of your credit score and what does (and does not) affect this ever-changing number.
Keeping Your Credit Score Healthy
There are a few ways that you can actively ensure that your credit score is kept at a nice high number:
Pay your credit cards and other debts on time – this includes bills like your cell phone!
Pay your parking tickets on time – many people don’t realize that unpaid tickets will affect your credit score.
When meeting with your mortgage broker, go over your credit report line by line (a service I offerto every one of my clients). They will be able to help you catch any unsubstantiated credit checks, fraudulent activity, and any mistakes by your lenders – and have them removed from your report.
Have a couple of credit cards or a line of credit on your report…but! Ensure they have reasonable credit limits for each card, and that are not using your limits to their max. *The unofficial rule is only use about 30% of your available credit.
Don’t apply for credit too often.
My Score Falls Every Time It’s Checked
Not necessarily true. You can personally check your credit report as many times as you like, and your score will not change. What DOES affect your score is a lender or creditor looking into your credit report. The more times lenders check (especially in a short period of time), the greater chance your score is going to decrease. Research has shown that people who are actively seeking credit tend to be people who are at a greater risk of possibly not repaying their credit, or seeking credit beyond their repayment capabilities. Lenders who see a lot of credit report checks also view this as a potential risk of fraudulent behaviour, and will move (by not extending credit) to protect themselves against it.
Decreasing your credit score also functions as a protective mechanism for YOU if someone is trying to fraudulently use your identity to gain credit (for themselves) on your behalf.
The gist here is that you can apply to have your credit checked a few times a year by lenders, and expect to have little to no affect on your score.
Buying a Home? Use a Broker!
Of course, when you are in the process of applying for a mortgage, some people go to more than one bank; all of which will look into your credit report, all within a short amount of time.
One of the great benefits of using a mortgage broker is that your mortgage broker will only check your credit once. One check will negate many lenders checking your bureau because your broker know which lenders will be the best for your personal situation and we can discuss your different mortgage options without needing to have multiple lenders look into your credit!
Working With Your Mortgage Broker
I work very closely with each and every one of my clients to ensure that they have complete knowledge of what their credit report says, and what their credit score is. Most of the time, I get to tell my clients that they have excellent credit! The few instances where a credit score needs to be increased, I work diligently with you to find all the ways that we can easily increase this score to get you into the home of your choice. This is just one of the ways I strive to make sure you have the best experience when working with Eitan Pinsky Mortgage Expert Team.