Your credit score is a three-digit
number ranging from 300-900 that tells future lenders how risky it is to lend
you money based on your history of making debt payments. There
are many misconceptions about what it takes to keep your score high. We asked
Henrietta Ross, the CEO of the Canadian Association of Credit (CACCS) to help
us sort fact from fiction:
1: You must use major credit cards to build a good score.
If you're unable to obtain a major credit card, there are other ways to build
your credit history. Making regular payments on installment loans such as a car
lease can positively affect your score, as do department-store cards and secure
credit cards, which require a cash deposit in the amount of the credit limit.
2: You can't make up for mistakes such as late payments.
It takes time, but your credit will become positive as you build consistency
with timely payments, Ross says. How much time it will take depends on a number
of factors, including how long the 'late payment' has been on your record and
how long you've had the debt.
3: Paying cash boosts your score.
You need to use credit in order to demonstrate your ability to make payments.
Using credit at least once every 30 days and making payments on time will keep
you in good standing, says Ross.
4: I will not qualify for a mortgage if I've had a poor credit score.
Lenders look at your entire financial picture, including your assets, available
cash flow, and debt-to-income ratio. They'll also review your housing
expense-to-income ratio, which is a comparison of your expected monthly
mortgage payment with your gross monthly income.
Karen Venier is a
Broker Associate at Keller Williams. She is a part of Carr Peck Group which has
been recognized locally and nationally as in expert in real estate.
Locally they are 6th in Denver Metro home sales out of 5,000 agents
and have been recognized by the Wall Street Journal and Real Trends as one of
the top selling agents in America. For more information feel free to contact heror call 303-908-9584.
Recognized as a top selling team in Denver Metro area. Nationally recognized for homes sold by the Wall Street Journal, Real Trends and Top 5 agent by RIS Media. Our goal is simple and that is to exceed our client's expectations by providing professional service, expert advice and exceptional results.
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