Real estate agents well understand how necessary it is to pay attention to your credit history, especially when it’s time to qualify for a mortgage. Last week I was invited to speak on this topic at a meeting of the Toronto office of Right at Home Realty, the #1 real estate brokerage in the GTA (2013) and Canada’s largest independently owned real estate brokerage.
When an Offer to Purchase does not complete, a common reason is the buyers did not secure appropriate mortgage financing. But in our experience this happens most often when there are issues with the buyers’ credit history.
We believe all Canadians should pay attention to and proactively manage their credit history. All would be home buyers should access their personal credit history sooner, rather than later, so that any unforeseen problems can be dealt with in advance of the buying process.
Related Article: why you should care about your credit history
Here are ten tips to maximize your credit score and have your credit report in tip top shape all the time:
- Keep your balances as low as possible relative to their limits. In a perfect world, you would always report zero balances even though you are using your cards regularly
- Use your credit cards like debit cards with benefits. Only use them if you can afford to pay off the balance each month. Enjoy their rewards programs, travel benefits etc.
- Exercise your cards regularly, and get in the habit of making multiple payments each month
- You may have one or two preferred use cards, which is fine, but do try to use every available credit facility every few months, no matter how minor the usage
- If you wish to dispute a charge on your credit card, first pay it – you will always get a refund you deserve
- Co-signing a financial product, even a cell phone contract, is like handing control of your credit history over to another person. Are you sure that is what you want to do?
- Make sure you have the “right stuff” – if you only have one $300 secured credit card you are not going to be able to get a mortgage when you need one. If you are not sure, please Ask Ross
- Try to keep new inquiries to as few as possible. Allow people access to your report with great reluctance – don’t be loose
- Make a note of all the credit facilities you have which may have annual fees or balance protection coverage – especially if you don’t use them, you might incur late payment charges and go into late payment status if you don’t realize you have charges on your statement.
- Create an online profile at equifax.ca and monitor your credit history once or twice a year to nip errors and problems in the bud. Order a paid copy, including your score, whenever you need one. The current price is $23.95. Online reports are far easier to read than versions you will receive by mail or in person.
Related Article: All the ways you can access your personal credit report
Related Article: Seven secrets about credit