How to you stop the cycle of bad credit mortgages? When refinancing a mortgage or taking out home equity with bad credit you have very few options. I have many private mortgage lenders that are happy to offer financing at an increased rate of interest if you are suffering from bad credit.
How to Improve Your Credit Score & Stop High Interest Mortgage Loans
Credit scores are a funny thing and how to improve your credit score can depend on a variety of factors:
- Credit inquiries, people that apply for credit multiple times a year impact their credit in a negative way.
- Trade Lines above 50% of the limit. Credit is intended for a short period loan not a monthly budgeting plan. Keeping balances at 50% of the limit negatively impacts your credit score.
- Missed or late payments. Keeping at lease the min monthly payment current will go along ways to maintaining good credit history.
- Collections R5 to R9 payment history. Taking care of past collections or letting old collections fall of credit reports can be a slippery slop. It is best to discuss what to do with a mortgage professional or debt consolidation agent.
If you have a private mortgage with accounts in collection on your credit bureau you have to determine if you are going to pay these collections out or if they will be falling off your credit bureau in a manageable time. Strategies should be discussed with a mortgage broker or financial advisor because without improving your credit score traditional financing will be a difficult process to qualify for.
Credit Reports, What Are They?
A credit report is a record about an individual that includes:
- Name, Address, Employment etc: Information about the persons Identity
- Creditors, Limits and Balances owed payment history.
- Information regarding past or present bankruptcies, court judgments, debts assigned to collection agencies & repossessions.
- Credit enquirers like how many times client apply to have their credit researched.
You can access a free copy of your credit report online that requires two pieces of ID.
- Link to Equifax Canada free credit report request form
- Link to TransUnion free credit report request form
- For a maximum of 6 years from the point a payment is missed or was late is the limit it can stay on your bureau.
- A first bankruptcy will remain on your credit bureau for 6 years from the date of discharge.
- Second bankruptcies do not have a statutory limit to report.
- You must provide consent before someone can view or obtain your credit report.
- Consent must be provable, meaning signed & documented in most cases.
- If there is an error on your credit report you can provide a 100 word statement to the reporting agency. ( you can contact the Consumer Protection BC to assist with this)
If You Need Assistance With Your Mortgage Or Financing Needs Please Call Me 778-839-3963