Credit Report
Most banks have made it very easy for customers to check their own credit score through the simple use of an online banking app... but what about your credit 'report'?
Your credit report is a detailed report regarding your credit history and current credit standing – it paints a more accurate picture of your credit standing than what you’d receive by simply checking your own credit score online.
Credit Report Overview
A credit report is a very important resource for assessing the lending risk to a potential borrower.
Lenders must mitigate their financial risk to avoid borrowers defaulting on their mortgage; to do this, they follow a strict risk assessment including an in-depth analysis of the mortgage applicant's 'credit report' (amongst other factors).
A credit report compiles financial information about a potential borrower to help determine whether they're a suitable option for a mortgage.
Will the borrower make their mortgage payments on time? Do they have high debts which may impact their chances of paying down their principal balance? Has the borrower declared bankruptcy?
These are some of the important factors which lender assess when 'pulling' a credit report.
How A Credit Report Is 'Pulled'
When applying for a mortgage, your licensed mortgage broker will need to pull your credit report. In in order to do so, they need consent from you first.
To pull a credit report, a licensed mortgage broker will:
- Request and obtain a signed ‘consent for credit’ from the client whose credit is to be pulled
- Once the document is signed, the licensed mortgage broker will submit the credit request to one of two credit bureaus: Equifax or TransUnion
- Almost instantly, the credit report is promptly returned with a detailed document regarding the potential borrower’s credit history
- The licensed mortgage broker will assess the file, and store it somewhere securely and confidentially
Information Gathered By A Credit Report
Most borrowers have a general idea of what their credit score is; your accurate credit score will show up on a credit report, and it's only a piece of your credit puzzle.
Information which will be assessed also includes your:
- Personal Information (Name, Social Insurance Number (S.I.N.), date of birth, address etc.)
- Length of credit history
- Number of ‘tradelines’ or credit accounts (ie. car loan, mortgage, credit card etc.)
- Number of credit report inquiries (Note that ‘hard inquiries’ or full credit report pulls may negatively impact your credit score, and may stay on your credit report for up to 3 years. ‘Soft inquiries’ (such as the basic report you pull through your banking app), doesn’t normally affect your credit score.)
- Length of credit history
Staying on top of your payments and insuring you have proof of cancelling a membership can do wonders for your future self!
Regardless of whether you're in a dispute with an establishment over a bill, ensure you don’t just ignore it; the last thing you want is to apply for a mortgage only to find out that the dispute has negatively impacted your credit report.
This could be enough for your mortgage application to be denied.
What Does An Ideal Credit Report Look Like?
It’s important to shape your credit in a way which lenders will find attractive.
To be a successful borrower, lenders will want to ensure your credit worthiness is in check!
An ideal credit report will have:
- A VERY GOOD or EXCELLENT credit score (checkout tips from credit 101 for how to raise your credit score)
- A ‘clean’ record, with payments made on time
- A ‘mature’ record, where credit history is lengthy
- A ‘thick’ record, which displays that the borrower has experience with multiple lines of credit
- No bankruptcy declarations
- Low debt utilization
- A ‘clean’ record, with payments made on time
That’s okay!
Knowledge is power; being aware of how to repair your credit report is invaluable.
Wondering If Your Credit Is Good Enough For A Mortgage?
Chatting with a trusted licensed mortgage broker can greatly assist you with meeting your mortgage goals.Safe to say, you’ve come to the right place!
I’m Kyle Benzies (licensed mortgage broker), and I’d be happy to answer any questions you may have regarding your credit and mortgage journey.
My goal is to see you in a fantastic position with your credit report so that when it comes time to purchase your dream home, you don’t face unexpected financing roadblocks due to something negative sitting on your credit report.
I’m just an easy (no-risk) phone call away, let’s connect!
***other conditions may apply to anything listed above. The information provided on this page should NOT be implicitly relied upon, and may not be 100% up to date. It's best to contact us for the most current conditions/program offerings for first time buyers***