As a REALTOR®, I sometimes get to work with first-time home-buyers. They are often a great pleasure to help because they are making a conscious decision to get into the Edmonton real estate, St Albert real estate, or area real estate market. They are making a long-term choice to purchase a home to own, and to take care of and decorate as they choose.
A mortgage pre-approval is a must before I take them out to see a selection of homes. What some of them don’t realize is that your credit report will have a direct bearing on your ability to be qualified for a mortgage.
Sometimes in the past, I have seen the financing for a buyer fall apart because, upon a deeper check of their credit history, the lender refused to authorize the mortgage.
What can you do to prevent this?
1. Keep track of your credit history
There are essentially two credit reporting agencies in Canada: Equifax and Transunion. If you go to their websites you can find out how to order your credit history report for free. You can usually do this twice a year.
If you have some blemishes on your history (late payments, over due accounts), you can work towards improving your credit history.
2. Be careful of “Shopping” for credit
If you go looking at buying a new vehicle, for example, you might be asked to fill out a form before taking the car or truck for test-drive. Be wary! Ask them if they are doing a credit check. If they are, you probably should tell them “NO”.
The way I’m told (and have seen for myself) it works, is that every time your credit is checked, it counts against your credit score. They discourage having your credit checked too often. (Checking your own credit history twice a year shouldn’t count against you)
What can you do?
If you go looking for a mortgage, I often recommend using a Mortgage Broker. They will check your credit history once, and then they shop it around to a variety of mortgage lenders who can offer you a mortgage. This prevents unnecessary credit checks.
If this doesn’t suit you, then just be aware that if you shop around, be vigilant on who checks your credit history. If in doubt, always ask if or when, they will be checking your credit history.
I recommend talking to your Mortgage Broker, financial advisor, and/or reading the info provided at the Equifax/Transunion websites. As they say…”Knowledge is power.”
Ben Officer, CD REALTOR®
RE/MAX Real Estate
