Yesterday Richard Moxley and I chatted in a Google Hangout about his book, personal credit and things people should know about the “credit game”. Some of the points that Richard covered included: joint credit, death and divorce, how to check your credit free as well as some simple things to know that could really improve your credit score. And by the way, he reverse engineered the credit scoring system to figure out how credit scores are calculated (he loves credit).
As a pick-up from yesterday (click here) regarding why credit scores are so important I thought I would offer another side of credit scores: What if credit scores did not exist? Having worked with borrowers for more than a decade I can tell you that a credit score is a real data point that banks and lenders have to know to determine what type of risk a borrower might be.
A credit score is the result of many different factors including the following: Continue reading “What if credit scores did not exist?”
It’s amazing to me that many of the clients that come to us seeking a mortgage or loan do not know their credit score. In fact, not only do they not know their credit score most of them have never even seen their personal credit report. I find it amazing because your personal credit score is one of the core criteria that a bank or lender will use when deciding to approve your request for a mortgage or loan.
If you are looking for a mortgage, shopping your mortgage request to banks and brokers can lower your credit score and may impact your ability to be approved. Continue reading “Don’t lower your score – check your credit”
Getting a mortgage broker, banker or mortgage specialist to check your credit score can lower it. Get any of them to check it within days of each other and watch your score drop like a rock. Most people don’t know that the more often your credit is checked the lower your score will be. This is because the scoring system assumes that you are being declined every time you get your credit checked when in reality you could simply be looking for a good deal. If your credit score falls too far then you may find yourself paying higher interest rates for your financing or you may not have any financing available to you. Continue reading “Check your own credit – why?”
Whether you are looking to borrow money for a residential mortgage, a commercial mortgage or business loan you should be aware of the 5 most important points a bank or lender will look for in determining your approval.
1. Character – Do you make your payments on time?
2. Capacity – Do you have money to make the payments?
3. Capital – Do you have financial stability and net worth?
4. Collateral – Do you have an asset that can be used to as security for the loan?
5. Conditions – Other items related to your request like location, property type, etc.
Your answers affect your interest rate, the amount a bank will lend you and how much (if any) they will charge you as a fee. A mortgage broker can help you put together your 5 answers and can also explain them to a bank on your behalf. If you want to know how you strong your 5 answers are, please email us at firstname.lastname@example.org or visit www.bridgecap.ca/dylan
There is a lot of advertising and information available about your personal credit score but most people are not aware of the impact their credit score can have on their borrowing. The lowest mortgage rates are available to individuals with high credit scores and if you do not have a high score you may end up having to pay a higher interest rate for your mortgage. There are many private lenders in the marketplace that will charge as much as 5-10% more than a bank for lending money to someone who does not have a high credit score. Banks have specific products available for individuals that have high scores and also change their lending criteria for these individuals. A borrower with a 700+ credit score could borrow more money than a borrower with a score of 699 or less. Your credit score is very important and if you would like more information about how it could impact you – email me at email@example.com or visit www.bridgecap.ca/dylan.