Items that affect a Credit Score – part two

Another question that everyone wants to know is how often our credit scores get updated.  The general consensus is that it get’s updated monthly.   So I’m here to tell you what other items affect a credit score, here is part two:

Payment History

Missing or late payments will have a negative effect on a credit score.  It is important to ensure that all payments are made on or before their due date, and in the correct amount.  Any judgments, bankruptcies, collections and other public records are considered quite serious and have a significant detrimental impact on a credit score.

 

Amounts Owed

A good rule of thumb is to keep balances below thirty-percent of the available credit limit.  Balances over this amount may lower a credit score.  Having several accounts with high balances in relation to the available credit may indicate that the individual is relying heavily on credit to meet his or her daily living needs.

Length of Credit History

The longer a trade line has been established, the higher the credit score.  Therefore if an individual is considering closing an account he or she should consider closing the most recently opened account.

 

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Items that affect a Credit Score

Items that affect a Credit Score

Good evening, over the next week or so, I will be posting items that affect a credit score.  First off I will start with New Credit and Inquiries, especially when client’s are applying for a Mortgage.   I often have client’s concerned that it will affect their credit rating should their bureau be pulled multiple times within a short time period.  I hope the following information will provide comfort in knowing how it works when you apply for a mortgage or auto financing:

New Credit and Inquiries

multiple inquiries can lower a credit score.  The program can determine that an individual is a credit seeker.  However, if an individual is seeking mortgage or auto financing, the program allows for a thirty-day buffer.  For example, if an individual applies for a mortgage on November 30th, and the credit report shows three previous inquiries in November, the program will ignore those three inquiries since they took place within the thirty-day buffer zone.

In addition, if the individual has mortgage or auto inquiries on his or her credit report outside of that thirty-day period, the program will only count them as one inquiry provided that they were made within a fourteen-day period.

However, multiple applications for other types of credit such as personal loans and credit cards will lower an individual’s credit score.  The program also takes into account the length of time since the last new account was opened.

 

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Why use a Mortgage Broker – Globe & Mail Article

Consumers are not educated enough still on what a Mortgage  Broker is and what they do.  Most importantly, they are not aware of what a mortgage broker can do for them to not only find the best rate and product matched to their individual needs, but also guiding and supporting the client throughout the process.  Brokers also provide a one stop shop, with only one application completed by client and the broker does the work there on having access to great discounted rates and products that a consumer would not have access to or even be aware of.

When you have a moment, please read the Globe & Mail article which will help to educate you further.

Referrals are always appreciated!

Globe & Mail Article – Why Use a Mortgage Broker

 

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