HOW TO: REPAIR YOUR CREDIT SCORE.

Your credit score is the compass guiding you toward your dream home. It's the magic number that mortgage lenders scrutinize to determine your eligibility and interest rates. But fear not, your credit score isn't the whole tale. Lenders weigh various factors like employment history, income, and assets to paint a complete picture. So, how can you steer your credit score in the right direction?

1. Review Your Credit Report
Start by peering into your credit reports from the heavyweights of credit reporting in Canada — Equifax and TransUnion. Scan for any anomalies, unfamiliar accounts, or signs of foul play like identity theft. Tackle outstanding debts head-on, aiming to settle unpaid balances and past-due accounts that have slipped into collections.

2. Punctuality Pays Off
The golden rule of credit: pay your bills on time, every time. Your payment history wields significant sway over your credit score, so make it a top priority to dodge late payments. Consider automating payments or setting reminders to stay on track.

3. Keep Balances in Check
Your credit utilization ratio is the secret sauce of credit scoring. Aim to keep this ratio under 30%, signaling responsible credit management. Avoid maxing out your credit limits, and if possible, aim for an even lower utilization rate. You can achieve this by curbing credit spending or requesting a credit limit increase.

4. Exercise Restraint with New Accounts
Every time you apply for new credit, your credit report gets a hard inquiry, which can briefly ding your credit score. Be selective about opening new accounts, especially if you're aiming to boost your score. Opening new accounts can also shorten your average account age, a factor in credit scoring.

5. Preserve Your Credit History
Don't shut the door on old accounts, even if they've been paid off and are gathering dust. Keeping these accounts open helps maintain the length of your credit history, a crucial component of your credit score.

When Will I See Progress?
Improving your credit score is akin to a marathon, not a sprint. The timeline varies based on your circumstances, but patience is key. Overcoming minor setbacks like a late payment or a few hard inquiries might be swifter than bouncing back from collections or bankruptcies. Every positive step counts, so stay committed to the journey.

Ready to Take the Next Step?
Reach out to a trusted mortgage broker for a complimentary assessment of your credit and financial situation. If you need recommendations for awesome brokers, let me know - I have some great contacts I can refer. They'll help you navigate the process to obtaining a mortgage approval, tailored to your unique circumstances.