Credit Check before buying your Mississauga home/condo
There are a number of steps to getting mortgage financing. A
particularly important step and one many people don't give much
thought to - is the credit check. As a routine part of the
application process the lender will order a copy of your credit
history.
Your personal credit history is compiled by credit bureaus which
collect information from various sources including banks, retailers
and other public records, creating a credit report. Information such
as: what credit and debit cards you have, the types of accounts you
have at various financial institutions, information about personal
loans, mortgages, student loans, etc., is all part of the report.
The report shows the creditors' names, account numbers, the date
accounts were started, the current balance as well as a detailed
payment history (for example: how many times you were over 30, 60,
or 90 days late in paying bills). Generally, credit reports show
information going back six to seven years. The report will also show
public information, for example, marriages, divorces, liens,
judgments that have been entered against you, bankruptcies, etc.
The credit bureau does not rate you - it merely provides information
on your credit history. The lender will examine the credit report to
aid in determining whether to lend you money. If the lender has any
concerns about something on the report the lender may ask you for an
explanation. Though lenders usually work as quickly as possible in
processing mortgage applications - the process can be slowed down if
the lender needs to go back to the applicant for an explanation
concerning items on a credit history. So, don't worry, but be
prepared to answer questions the lender may have - often a simple
explanation will do.
The lender will also use the report to verify other information on
your mortgage application, for example: information about your
employment status, your address (including the name of your landlord
and perhaps rental payment history), etc. The credit report will
also indicate inquiries made by other creditors over the period of
the report. This information might be useful to a lender to show
what other avenues of financing you might have tried and it may
raise questions about why another potential creditor declined to
lend it to you.
Honesty is the best policy - and that certainly holds true when
applying for a mortgage. If you think there might be any credit
problems - tell the lender up front and ask about the lender's
policy prior to applying for the mortgage. There is no point in
trying to hide something that will show up in your credit history.
Of course, even if you think your credit record is fine, there may
be detrimental comments on the report about which the lender may ask
you, at the time of credit check.
Just like the old saying - a stitch in time saves nine - by credit
check and getting a copy of your credit report before you apply for
a mortgage you may be able to avoid surprises and possible delays
that may occur in having to answer questions about your credit
report. Because the report contains information about you, you have
a right to inspect a copy of it. Equifax, one of Canada's largest
credit bureaus, will mail consumers a free copy of their personal
credit file upon request. The request must be by mail or via fax,
and certain information must be supplied with the request. For more
information, call or visit
credit bureau Equifax,
at 1-800-465-7166 or TransUnion 1-800-663-9980
If you disagree with something reported by the credit bureau in your
credit history you have the right to challenge it and ask that the
information be corrected. For example, perhaps the report shows that
you were over 90 days late paying a bill but the report does not
indicate that you withheld payment pending a settlement of a dispute
with the creditor.
OR perhaps you were late with a particular
payment because you were away. Whatever the explanation, contact the
credit bureau to attempt to clarify the matter and have the file
corrected. Equifax for example, ensures that file correction
procedures to personal credit files are made within seven days, and
they send amended copies of your history to any company that has
received your credit report in recent months.
Call Amit to get pre-approved for
the competitive mortgage rates with flexible payment terms,
automated loan approvals and the top-notch customer service in
Mississauga and area.
Also see
video about ordering you free credit report once a year by calling
credit bureaus.
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