understanding Credit

Credit reporting is not an exact science. Credit agencies use unique methods to calculate your credit score and determine its history. In Canada, there are two credit reporting agencies; Equifax and TransUnion.

Understanding Credit

How it works

Banks rely heavily on credit reporting. While some banks will look at both credit agencies when considering a mortgage application, others will subscribe to one or the other. Understanding credit and its impact is essential when one is purchasing, renewing or refinancing a mortgage.

Equifax and TransUnion are the two credit bureaux in Canada. Although there job is to report on credit worthiness it is the responsibility of the credit issuer to report up-to-date information to the credit agency. 

Credit agencies do not actively look for accurate and new information; rather, each credit issuer reports up-to-date information to the agency in which they subscribe. The two credit agencies do not work together or share information. It is common for one agency to have outdated information, for example, if all of your credit products (Credit Cards, Loans, Accounts, etc.) are with one bank, you may not have a credit history with both agencies.

Having this information available is just another tool that helps me secure your mortgage that meets your needs. It also significantly reduces the amount of credit inquires, which you will see below makes up a portion of your overall score.

Credit Breakdown

Have you paid your bills on time? And if not, how late were you, when were you late and how often?

How much do you owe on each account, and how much of your credit limit have you used?

How long have you had each account?

How many credit requests have you made and how many reports have been pulled on you.

What kind of debts do you have?

Credit Score

Credit scores range from 300-900. It is important to understand credit scores and their role when making a major purchase or financial decision. Speak with a broker and ensure you are in the best possible position, so if any issues arise, we can address them. Credit can be a sensitive topic, and your information is kept confidential.