Credit score is the ultimate criteria while applying for a mortgage. How does it effects your mortgage process?

­Following are important factors which affect your credit score.­

Payment History­

Payment history is the most important criteria which affects your credit score and tells lender your attitude to pay while applying for mortgage.
People are rated from R0 through R9 based on their credit history. R1 is the top rating and signifies payment within 30 days of due date. Higher numbers represent a decrease in payment time from “on time” to “one month late”, and beyond. The lowest rating level, R9 shows bad debt that is placed for collection. R0 means too new to rate, or that credit has been approved but not yet used.

Some points on the rating system:

  • Rating agencies such as Equifax, Transunion, etc. use credit information on over 35 million Canadians, tracking all kinds of debt and how the population pays it back. This includes credit cards, lines of credit, banks loans, car loans, student loan, and mortgages.
  • Late and missed payments, or maxed out credit cards, will lower credit scores over certain time.
    Scores can be changed. They represent specific points in time and thereby can be changed based on present and future behavior.
  • If people have a poor credit score it can be increased by paying back debts on time. However, this means that the individual will need to have debt of some sort.
  • Don’t apply for credit unless necessary. Opening multiple accounts too quickly can negatively affect credit rating. It may be taken as a sign that the individual is experiencing financial difficulties or taking on more debt than they can handle.

Credit Product Type

Mortgages are different then credit cards. Credit cards are different from car payments. Credit product type refers to the type of credit people take on and the risk involved with the different forms of credit.


Number of trades utilized also has high impact on credit score. No matter your limit of trade is 1000 dollars or 10,000 dollars, if you use all the limit for long time , consistently it is going to impact score .

Impacting your credit

Below are the aspects of your credit profile and history that are important to your Equifax credit score. They are listed in order of impact to your score—the first has the largest impact, and the last has the least.

  • Ratio of satisfactory trades to total trades in last 24 months.
  • Number of personal finance trades with high utilization in the last 3 months.
  • Worst rating for installment trades in the last 12 months.

Your credit score of 750 is better than 52% of Canadian consumers.

The bottom line:

Lenders consider many factors in addition to your score when making credit decisions. However, most lenders would consider you to be a very low risk. You may qualify for a variety of loan and credit offers at some of the lowest rates available. If you’re in the market for credit, this is what you might expect:

  • You may be able to obtain high credit limits in your credit card.
  • Many lenders may offer you their most attractive interest rates and offers.
  • Many lenders may offer you special incentives and rewards that are geared to their most valuable customers.


It is important to understand that your credit score is not the only factor that lenders evaluate when making credit decisions. Different lenders set their own policies and tolerance for risk, and may consider other elements, such as your income, when analyzing your creditworthiness for a particular loan.