Do you have less-than-perfect credit? Homeguard CAN help!
If you have less-than-perfect credit rating, finding a mortgage can be very challenging. Our agents are specialists in this market; we will provide you with support throughout the entire process to make it as simple and painless as possible. We are able to offer strategic short-term solutions that allow our clients to get back into the prime market as soon as possible. We deal with a number of lenders and can help you re-establish your credit to make sure you get the very best deal available.
We can help with purchases and refinances, even with previous bankruptcy, judgments, and collections.
Short-Term 1-2 Year Options
Up to 35 year Amortization Options
Cash Out Equity
Full/limited or stated income documentation
Consolidation of high interest credit cards and loans
You should check your credit with either Transunion or Equifax annually to ensure its accuracy. If you notice any errors ensure you dispute them as soon as possible. For more information, contact one of the credit bureaus directly at:
The credit score is not a summary of the applicant's credit as of today. It is a prediction of the applicant’s likelihood to default on a debt over the next two years. The lower the score, the more likely that client is to default in the future, and therefore, the applicant is considered a higher risk candidate for a mortgage.
What do the R#'s or I#'s mean on my credit report?
The repayment history of the trade lines are recorded as follows:
- R1 or I1: payments are being made on time and as agreed.
- R2 or I2: payment is 30 days in arrears.
- R3 or I3: payment is 60 days in arrears
- R4 or I4: payment is 90 days in arrears.
- R5 or I5: the unpaid balance is about to be sent to a collection agency.
- R7 or I7: regular payments are being made under a consolidation order (OPD).
- I8: security for the loan has been repossessed, either voluntarily or involuntarily.
- R9 or I9: the outstanding debt has been sent to a collection agency.
- Type of credit – 10%
- Amounts Owed – 30%
- Payment History – 35%
- Length of Credit – 15%
- New Credit Inquiries – 10%
Tips to Increase Your Credit Score
Lower your debt-to-income ratio by paying off debts. This will increase your credit score and get you better rates and terms on loans. Lenders have various criteria, but two general rules of thumb are common:
- Your entire monthly debt load should not be any more than 40 per cent of your gross monthly income (this includes housing costs, car payments, personal loans and credit card payments);
- Debt payments (excluding mortgage or rent) should not exceed 20 per cent of your monthly take-home pay.
- Access your credit report and score six months to a year ahead of seeking out a major loan. Most reports will indicate problem areas and suggest ways to improve.
- There are two major credit bureaus in Canada: Equifax and TransUnion. It's only necessary to check one bureau since most creditors are registered with each.
- If your score is below 680, work hard to improve it. You will get better loan rates and terms the better your credit is.
- Pay bills on time. Even just a couple of days past due counts as late.
- Keep your debt-to-credit access ratio below 50 per cent; that is the total debt on consumer cards versus the total credit limit.
- Limit the number of so-called "hard inquiries" made about you to credit bureaus (inquiries can only be made with your permission).
- Your own "soft inquiry" into your credit has no impact on your rating and bureaus offer unlimited monitoring (for a flat fee).
- "Hard inquiries" typically count against your credit rating, with two exceptions: auto loans or mortgage inquiries made over a period of weeks are lumped into a single inquiry to allow consumers to shop for the best deal with no impact.
- If your score is good (reports will indicate how you compare with all other Canadians) take it to your lenders and ask for a better rate.
- On your highest interest rate debt, pay the minimum payment plus any additional amount you can afford. Keep paying the minimum on the others. Once the highest-interest debt is paid off, go to your next highest interest rate debt and apply the money you were paying toward the first debt toward the second debt, and so on until your debts are paid.
- Cancelling credit cards can negatively impact your credit score because it boosts your debt-to-credit access ratio and shortens your credit history. Use only the card with the lowest rate and, if necessary, lock the others in a drawer.
- Keep credit cards and accounts that have been open and established the longest open relative to newer accounts if you decided to close accounts.