How Your Credit Rating Influences Your Mortgage

Your credit rating, for the most part, determines the interest rate you will get. In a nutshell, the higher your score, the lower the rate you can get, and the more money you may qualify for. To learn everything you need to know about your credit scores, what they are, and dealing with any negative factors (e.g. collections, OPD, bankruptcy issues, no credit) with regards to your history, check out our website's section on What You Need To Know About Credit Scores.

In order to begin building or improving your credit score, you first need to find out whether or not you got one. And if you got one, you need to know how you can maintain a good score, improve it if it is low, or correct any inaccuracies found in your credit history. The following are the steps you need to take:

Step 1: Check Your Credit Rating

To get your Equifax credit history, download the Equifax Request Form. After filling it up you may fax it to (514)355-8502 or email a scanned copy to consumer.relations@equifax.com. You are entitled to one free copy of your report every 12 months. However, credit scores are not free. You may order it from the Equifax Canada website which also sells the reports.

Step 2: Build Or Improve Your Credit

Got Credit? Here are some ways to improve it.

  • Make sure to correct any inaccuracies in your history before you apply for or renew a mortgage. This will help prevent you from getting a higher interest rate because of inaccurate and/or negative credit information.
  • Generally speaking, avoid exceeding 70% of your credit limit for each of your credit card or loan. The higher your score, the lower the percentage of your credit limits you should use to maintain, if not improve, your score.
  • Try to pay off your account balances on time and pay down your installment debts like mortgages and car loans.
  • Do not apply for more credit cards than you need.
  • Try to avoid closing accounts, especially ones that have long established history.

Got Bruised or No Credit? Ways to build up one.

Individuals who declared bankruptcy and just got discharged are advised to rebuild credit as soon as possible. The same advise applies to someone with little or no credit. Doing so makes it so every account opened and reported starts "aging", and the longer the time they sit, they more favorable your history and score will be in the eyes of the lenders.

The way to build credit is to start applying for one. You can start with credit cards. However, you must choose the type of credit card that reports to the credit bureau more often with accurate information on your balances and credit limit. Avoid department store or gasoline company credit cards, as well as Capital One credit cards. The following are loan accounts we recommend:

  • Home Trust Secured Visa - you will need to pay a security deposit in order to be eligible for approval. Your credit limit will be set at the amount of this deposit. To open one, fill out the Home Trust Secured Visa Application Form. All applications must be accompanied with a $1000 minimum deposit and copies of 2 pieces of Government issued ID. Mail completed application and your security deposit to: Home Trust Company, 145 King Street West, Suite 2300, Toronto ON M5H 1J8
  • People's Trust Secured Mastercard credit card - needs a deposit just like the Home Trust Secured Visa which will also be the amount of your credit limit. To apply for one, fill out the People's Trust Mastercard Credit Card Application, print it out, sign and mail with your security deposit check to: Peoples Trust, P.O. Box # 48235, 595 Burrard St. Vancouver, BC, V7X 1A1.
  • Apply for an unsecured loan of about $2000 with a reputable financial institution like Citifinancial - this is a great way to establish credit for those who do not have money to put down for deposit on secured credit cards.

Successfully opening the above three accounts and getting them reported on your credit history is a great way to start establishing your credit. Lenders usually required at least three (3) accounts on your history for a minimum of two (2) years. Some may look at your file if you have a minimum of one year. The important thing to remember is start NOW to get the accounts to stay longer on your file.

Step 3: Report Any Inaccuracies

In order to update or report mistakes on your Equifax credit report, call up 1-800-865-3908 to speak to a real person who can also give info as to how to "fix" your report. To send letters and receipts of paid debts for updating your credit bureau, you may fax a Consumer Credit Report Update Form found at www.econsumer.equifax.ca/ca/view/investigation/investigation.jsp to fax number 1-514-355-8502 or mail it by registered mail to:

Equifax Canada Inc.
Consumer Relations Department
Box 190 Jean Talon Station
Montreal, Quebec H1S 2Z2

Once Equifax receives your letter, they will start the dispute resolution process. By law, they are required to investigate any reported mistakes and get back to whoever reported it within 30 days. They will review the information you sent and if this does not resolve the problem, they will contact the submitter of the disputed information to review the details. The submitter will investigate and report to Equifax their conclusions. Equifax may then make the changes to your credit file unless the disputed information is correct. You will receive a revised credit report if changes are made. The whole process can take up to 60 days or longer to complete.


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