top of page

What counts as a bad credit score, and can you still get a mortgage?



In Canada, understanding what constitutes a bad credit score and how it affects your ability to get a mortgage is crucial for potential homebuyers. A credit score is a numerical representation of your creditworthiness, and scores in Canada typically range from 300 to 900. Generally, a score below 560 is considered poor. This can result from late payments, high credit card balances, or a limited credit history.


Having a low credit score can make getting a mortgage more challenging, but it's not impossible. Lenders often view borrowers with low scores as higher risks. Consequently, traditional banks may be reluctant to approve mortgage applications from individuals with poor credit. However, there are alternative lenders who specialize in offering mortgages to those with less-than-ideal credit scores, though these often come with higher interest rates and stricter terms.


Improving a bad credit score before applying for a mortgage is advisable. This can be done by paying down debts, making payments on time, and avoiding new credit inquiries. It's also helpful to review your credit report for errors and dispute any inaccuracies, as correcting these can positively impact your score.


For those with bad credit who are determined to secure a mortgage, it might be beneficial to work with a mortgage broker. Brokers have access to a wider range of lenders and can often find mortgage options that might not be available directly to consumers. Additionally, saving for a larger down payment can also improve your chances of mortgage approval, as it reduces the lender's risk.


5 views

Comments


service.png
  • Instagram
  • Facebook
  • Twitter
  • LinkedIn
  • YouTube
  • TikTok
Email Support Photos_Square.png
bottom of page