In order to purchase a home, you must have an established credit history. Each time you pay a bill (for your credit card or for a monthly service such as your telephone or electricity), you are establishing a credit rating for yourself. A credit rating is a number or score that banks, mortgage companies, and other lending businesses use to assess your level of financial responsibility.
Paying your bills on time every month, contributes to having a good credit rating. If you miss payments, or are often late making your payments, your credit rating is probably not as good, and money lending institutions will consider this when you apply for a loan. Numerous factors contribute to your overall credit score, such as outstanding debt, payment history, severity and frequency of derogatory credit information, and the amount of credit you use compared to what you have available.
Also important is the length of your credit history. For many immigrants, this only begins after entering Canada.
To begin to establish a credit history:
Your Credit Rating
Once you’ve begun establishing your credit history, it is a good idea, and your right as a consumer, to know exactly what your credit rating score is, even if you always pay your bills on time.
In Canada, Equifax Canada and TransUnion are the two major credit rating companies and will give you a copy of your credit history and overall credit rating score, usually for a fee.
For more information on how to establish your credit history, contact an Accredited Mortgage Professional at VERICO One Link Mortgage & Financial at 204-954-7620.
(Source: Genworth Financial)