Understanding Your Credit Report

As credit has become more and more abundant in our society, your credit report, and thus your credit rating, has become more important in your daily life. Your credit rating affects all aspects of your financial activities when it comes to borrowing money. Your credit rating also has the ability to affect the job you get, the apartment you rent, and even the ability to open a bank account.

Your credit report itself is simply a listing of all of your consumer debts. Here in Canada, the two main credit reporting agencies are Trans Union and Equifax. Both agencies have a credit history file on anyone who has ever borrowed money. Every time you borrow money, or make a payment on a loan or credit card, the lending institution then reports the information about the transaction to these two agencies. In addition to credit information, you will also find liens and judgments on your credit report as well as your address and possibly your work history. The accumulation of all of this information is what gives us your credit report.

The information on your credit report varies based on your creditors and what they have reported about you. Potential lenders and others, such as employers, view your credit history as a reflection of your character. Whether we like it or not, our financial habits have a lot to say about the way in which we choose to live our lives.

The credit score, or beacon score, is a number which gives mortgage lenders an idea of your lending risk.

Credit scores range from 300 to 900, the higher your credit score the better. The mortgage products and interest rate that you will qualify for are on occasion determined by your credit score.

One thing that many people do not know is that you have the legal right to obtain a copy of your credit report. A mortgage professional can help you obtain a copy of this report and go through it with you to verify that all of the information is true and correct.

The good news is that your credit report is a working document. This means that you have the ability over time, to repair any damaged credit and increase your credit score.

"I went with Mortgages dot ca for my mortgage. My rate was 2.89 for 3 years, which was the best rate I could find. James was my mortgage broker and he was excellent — always quick to respond to any questions and also worked through the weekend with me to make sure we had everything submitted on time for Monday. There was a delay on TD banks’ end that caused my closing to be delayed but James contacted the VP of the bank to help get my application approved quicker. Once I secured my rate I was expecting to handed off to the bank for my application (not sure if this is standard) but instead James collected all the paper work from the bank and filled in some of it for me, circled the areas for signature etc. so it was an easy process for me. I will probably use James for my next mortgage if the rates are still competitive"

− Jason Cowan

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