How to Get Your Free Credit Report in Kitchener-Waterloo
The first step to understanding how your credit report affects your mortgage and interest rate is to get your free credit report. I have put together resources for you to get you started. Then let's talk about how your credit score will affect your mortgage and what you can do to improve your credit score before you apply for a mortgage.
You can get free credit reports in Canada from the two main credit bureaus: Equifax and TransUnion. There are different ways to request your free credit report from each bureau, such as online, by phone, by mail or in person. Here are some details on how to get your free credit report from each bureau:
Equifax:
You can request your free credit report online, by phone, by mail or in person. To request online, you need to create a myEquifax account and download your credit report from there. To request by phone, you need to call 1-800-465-7166 and enter your Social Insurance Number. To request by mail, you need to download and complete the Canadian Credit Report Request Form and send it along with copies of two pieces of identification. To request in person, you need to visit one of their locations and bring at least two pieces of identification. You can access your Equifax credit score online for free and it is updated monthly. For more information, visit Equifax Canada or How To Get A Free Credit Report at Equifax Canada.
TransUnion:
You can request your free credit report online, by mail or in person. To request online, you need to create an account and download your credit report (called Consumer Disclosure) from there. To request by mail, you need to download and complete the Consumer Disclosure Request Form and send it along with copies of two pieces of identification. To request in person, you need to visit one of their locations and bring at least two pieces of identification. For more information, visit TransUnion Canada or How do I get a copy of my TransUnion credit report?.
Other companies may also offer to provide your credit report or score for free, such as Borrowell or Credit Karma. However, you should be careful about sharing your personal information with these companies and read their terms and conditions carefully before signing up.
A good credit score can help you get a lower interest rate and save money on your mortgage. A poor credit score can make it harder to get approved for a mortgage or result in a higher interest rate and more fees. Therefore, it is important to check your credit report before applying for a mortgage and make sure it is accurate and up-to-date. You can get your free credit report from Equifax or TransUnion once a year by mail or online. You can also access your Equifax credit score online for free and it is updated monthly.
You can also use Borrowell or Credit Karma to monitor your credit score and get tips on how to improve it. However, be careful about sharing your personal information with these companies and read their terms and conditions carefully before signing up.
To improve your credit score in Canada, you need to follow some basic steps that can help you demonstrate your creditworthiness and ability to repay a mortgage. Here are some tips that can help you improve your credit score:
Review your credit reports from both Equifax and TransUnion, the two main credit bureaus in Canada.
You can get your free credit report from each bureau once a year by mail or online. Check for any errors or signs of identity theft or fraud and report them immediately.
Pay your bills on time and in full every month.
Your payment history is the most important factor for your credit score, so it's crucial to avoid late or missed payments. If you have trouble remembering to pay, you can set up automatic payments or reminders. If you can't pay the full amount, at least make the minimum payment or contact your lender to arrange a payment plan.
Keep your credit utilization rate low.
This is the percentage of your available credit that you use. For example, if you have a credit card with a $5,000 limit and a balance of $1,000, your credit utilization rate is 20%. It's generally recommended to keep your credit utilization rate below 35%. You can do this by spending less on credit, making more frequent payments, or asking for a higher credit limit.
Limit applying for new credit accounts.
Every time you apply for a new credit account, such as a credit card or a loan, the lender will do a hard inquiry on your credit report, which can lower your credit score temporarily. Too many hard inquiries in a short period of time can also signal that you are desperate for credit or have trouble managing your finances. Therefore, only apply for new credit when you really need it and compare different offers before applying.
Use different types of credit.
Having a mix of different types of credit, such as revolving (credit cards) and installment (loans), can show that you can handle various forms of debt responsibly. However, don't open new accounts just to diversify your credit mix, as this could hurt your score more than help it. Only apply for the types of credit that suit your needs and budget.
Keep old accounts open.
The length of your credit history is another factor that affects your credit score. The longer you have a credit account open and in use, the better it is for your score. Closing an old account can reduce the average age of your accounts and lower your available credit, which can hurt your score. Therefore, consider keeping an old account open even if you don't use it often, as long as there is no fee associated with it.
By following these steps, you can gradually improve your credit score and increase your chances of qualifying for a mortgage in Canada. However, keep in mind that improving your credit score takes time and patience, and there are no quick fixes or guarantees. You can also visit How to improve your credit scores | Equifax Canada or How do I get a copy of my credit report? for more information and resources on how to improve your credit score.