When shopping around for the perfect home, buyers also need to have their mortgage in mind to help them create a budget. Your mortgage is essential to your house hunting process and there are a few considerations home buyers need to keep in mind. Home Buyer real estate experts will always advise clients to create a solid budget before they start the home buying process. Credit scores in Canada and the United States slightly differ in terms of their range and what the scores represent. Here is the breakdown of score and meaning in Canada:
Canada Credit Score Rating via TransUnion - Maximum is 900
Excellent (Scores 801+)
Any score above 801 is considered an excellent score, leading to borrowers receiving better interest rates.
Good (Scores 750-800)
Falling within this range still provides little to no trouble in obtaining approval for a mortgage.
Fair (Scores 700-749)
This range is still considered to be in good standing, however, borrowers may receive slightly higher rates.
Poor (Scores 600-699)
Those who fall in this category will need to modify their score in order to receive a mortgage.
Very Poor (less than 599)
Any individual with a score below 599 will need to vigorously work on their credit score to repair their standing, and seek help to accelerate the process.
There are still 5 factors used to determine a credit score, however, 3 categories account for 81% of the overall total. These 3 categories include:
1) Recent Credit: Your recent history accounts for 30% of your score. This is determined based on the number of times a consumer's credit has been checked and signifies if they have been applying for more credit.
2) Payment History: The payment history accounts for 28% of an individual's credit score. It checks on the timeliness of payments and the minimum payments being paid on time.
3) Utilization: The utilization of credit, which shows the outstanding of overall debt a consumer already has, accounts for 23% of the credit score.
Keep an eye out for our next blogs, which helps homebuyers in Calgary to increase or maintain a better credit score.