When is the Last Time You Checked Your Credit History?

Credit History
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Credit worthiness and the availability of money are always of interest to the mortgage shopper. We will discuss, in brief, just how important your credit rating is.

The old saying “Cash is King” rings true when it comes to purchasing power. When banks and mortgage companies talk about borrowing power, the adage changes. Now “Credit is King”.

Your credit history plays an integral part in the underwriting process of a mortgage application. Consider credit an indication of the risk level associated with the application. If credit is poor, risk goes up. If credit is good, the lender will view the application with much less hesitation. This often directly correlates to what mortgage rates they will offer.

We have seen credit scores ranging from the mid 400s (FICO score) to the mid 800s. Since the recession in the United States kick-started a panic driven economy, we predicted that we would see scores drop across the North American board. This prediction rang true in the US, but in Canada credit scores only dropped marginally. Similarly, there was not a remarkable surge in pre-foreclosures or bankruptcy proceedings.

Americans, in general, carry a heavier debt load than do Canadians, and thankfully, conservative lending in Canada saved most of the nation’s residents from falling into this predicament.

Your credit is vital. We constantly stress to our clients, and to all Canadian consumers, that protecting and monitoring your credit score is just as imperative as attending your annual health checkup. Don’t assume everything is okay; check your own credit every six months.

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