Your Credit Bureau… keep it strong & healthy

N1111P35001HYour Credit Bureau… keep it strong & healthy

We talked not too long ago about the 5 C’s of Credit. The criteria that will demonstrate a borrower’s ability and desire to repay the money they are borrowing. Character, Capacity, Collateral, Capital and Credit are the factors that a lender will review and confirm prior to offering clients money in the form of a mortgage, line of credit or credit card.

Today we look more closely at the behaviours that will ensure that 
your profile and history on Canada’s credit reporting agencies are clean and strong. The all important Beacon score can be drastically affected by repayment and borrowing habits.

• Ensure that you never borrow over your allowable limit. Even though some credit card companies allow for exceeding your limit, this will adversely affect your credit bureau. Try to keep balances at or below 50% of your limit. If you are consistently exceeding that amount, contact your credit card company to find ways to remedy the situation. • Always make your payment in advance of your payment due date. Remember that it can take time for your payment to arrive by mail or be processed by your bank. Timely repayments can keep your credit profile in good shape. • Unable to pay off the balance owing in full on your credit card? Be sure that you are making at least the minimum payment each and every month. Even the smallest past due amount can be trouble. “But I only owed $40!” Late payments are late payments. Be sure to make payments when they are due, no matter the amount owing. Equifax and Transunion, the two credit reporting agencies in Canada, can provide you with a free copy of your credit bureau. It is important that you ensure the items appearing on your report are correct. Mistakes can happen! Someone with the same name that doesn’t always pay their bills on time can mistakenly appear on your report. Take the opportunity to review your beacon score as well. The beacon score is a snapshot of the risk you pose to the lender, the higher the number, the better, with 680 being the benchmark for very good credit. Wondering if you are in good credit health and are in a position to consider your first home or to upsize your current home? Mortgage brokers can answer these and many other questions for you, then help you to take the steps to improve or protect your credit.
– Written by Andrea Sammut,
Licensed Mortgage Agent
at Mortgage Architects Brokerage
#10287 located in Orangeville, Ontario