Having bad credit can be a major roadblock in your financial life, especially when applying for a mortgage in Canada. However, it's important to understand that having bad credit doesn't mean you can't take steps to improve your financial situation. Here are some tips for managing bad credit:
Check your credit report: The first step to improving your credit is to understand what's affecting it. You can request a free copy of your credit report from Equifax to check for errors and understand what's impacting your score.
Make timely payments: Late or missed payments are one of the main contributors to a bad credit score. By making timely payments, you can demonstrate that you're responsible with credit and start to improve your score.
Reduce debt: High levels of debt can also hurt your credit score. Paying down the balance on your credit card or LOC can have a significant impact on your credit score. To improve your score, try keeping the balance on your credit card below 50% of the limit.
Be careful with new credit applications: Every time you apply for new credit, it shows up as a "hard inquiry" on your credit report and can lower your score. Avoid applying for new credit unnecessarily and try to only apply for credit when you need it.
By following these tips and seeking guidance from financial professionals, you can start to improve your credit score. Remember, it takes time and effort to improve your credit, but with patience and dedication, you can turn things around.
Please feel free to reach out if you have anymore questions!
-Greg Matthews
Associate Mortgage Broker