Understanding how credit affects your mortgage will assist you in making the right decisions for your future. Did you know it is one of the key requirements when attaining a mortgage? Your credit score and what is on your credit bureau can be major factors when determining whether or not you are approved as lenders use it to assess your risk and financial health. The better your credit score is, the more access to better rates you will have. Focus on having a score of at least 680.

We asked some of our One Link Mortgage Brokers what mistakes they often see in a borrower's credit management. Here are their tips on what to avoid:

1. Don't allow your credit balances to sit at, or over, your limit. This can cause a negative impact on your credit bureau and cause your score to actually drop. Make sure to monitor your balances and know your credit limits. Try to keep your balance below 50 per cent of your available credit.
2. Make at least the minimum payment on your balance every month. Note, however, that a long history of only paying the minimum amount could indicate to a lender that you are under financial stress and are unable to pay off the balance. Lenders could in turn feel that you would possibly default on your mortgage. Also remember that interest charged for unpaid balances carries over and adds to your balance next month. If you aren't careful, this could put you over your credit limit.
3. Maintain all bill payments and make sure to pay your cell phone bill on time every month. Any late payments will report on your bureau.
4. Don't miss credit card payments. Once you have missed a payment, your next payment will be higher since you have to make two payments as well as also pay the late fee. Again, a history of missed payments will be a red flag to lenders and will negatively impact your score.
5. Limit financing inquiries (think shopping for a new vehicle) as each inquiry will report on your bureau and it can negatively affect your score.
6. Don't apply for a credit card you don't need; especially just to get a free gift or perk. Too many inquires, particularly in a short period of time, can sometimes be interpreted as you are opening multiple accounts due to financial difficulties or that you are taking on more debt than you can financially handle.

Do you have questions about your credit score and how it impacts your mortgage application? Talk to one of our trusted Winnipeg Mortgage Brokers to learn more - 204-954-7620.