Credit scores

This is an informational note relating to Credit scores. Credit scores help assess a person's financial health and indicate the risk to lenders.

Credit reporting agencies create a file on a person using information gathered from sources such as banks, finance companies, credit unions, retailers and others who provide information related to the financial transactions we have with them. 

When we apply for a mortgage or loan, the lender will check our credit history. Our credit score influences the amount we can borrow and also the interest rate. Generally, most lenders like to see credit scores in the range of 700 and higher, while CMHC insured mortgages require a credit score of 640 or higher.

Many factors affect the credit score such as length of credit (at least two years), payment history (avoid late payments), any credit inquiries, types of credit, and debt ratio (less than 70% of our credit limit)

Clients who are about to make a home purchase should be careful with their credit activity, as it will avoid any unwanted surprises, at the time of closing.