What is a credit score?



Credit is a critical component to the home buying process. Lenders need to see that you are financially responsible to pay your bills. This can be shown through the credit report. A credit report is a history of how you meet your financial obligations and is created when you first borrow money or apply for credit. On a regular basis, the companies that lend money or issue credit cards to you (banks, finance co., credit unions, retailers, etc.) send the credit reporting agencies specific and factual information about their financial relationship with you, including when you opened the account and if you make your payments on time, miss payments or have gone over your credit limit. There are two major credit bureaus in Canada, Equifax and TransUnion. They receive this information directly from the financial and retail institutions and retain it to help other lenders make decisions about granting you credit.

So what is in this credit report? Below is a list of the major sections found in a credit report:

  • Personal identification: Name, address, date of birth and Social Insurance Number (SIN)

  • Consumer statement: Allows the consumer to add a brief comment about any information in the report.

  • Credit information: Details of credit accounts, transactions and history of late payments.

  • Public record information: Secured loans, bankruptcies and/or judgments.

  • Third-party collections: Any involvement with a collection agency trying to collect on a debt

  • Inquiries: All organizations or individuals that have requested a copy of the credit report in the past three years.


This report generates an overall credit score based on how you pay your financial obligations on time. This is formulated into a three-digit score ranging from 300-900. The higher the score the better. Here is the ranges and what they indicate:


780 and above - Excellent Credit

779-720 - Very Good Credit

719-680 - Good Credit

679-620 - Average Credit

619-580 - Poor Credit

579-500 - Very Poor Credit

500-300 - Very Poor Low Credit


If you have excellent credit then congratulations! - keep doing what you're doing, because you are a rockstar and will have access to better options for features, lenders, rates, and money. On the flip side, if you have poor credit, we can help you find a temporary solution and provide advice on how to improve your score with a longer term goal of moving you into a better mortgage product. Here are a few helpful tips and tricks to improve or maintain your score:


  • Pay all of your bills on time. Paying late or having your account sent to a collection agency has a negative impact on your credit score. Even if you have a delinquent account, showing that you are paying it down allows the lenders to see you are working in the right direction.

  • Do not run your balances up to your credit limit. Keeping your account balances below 75% of your available credit may also help your score.

  • Look for inaccuracies in your report. It’s easy to get your credit report and dispute inaccuracies. Remember the credit bureaus are just the messengers. By being proactive and checking up on your report once a year you can make sure nothing is out of whack. Here is a link to check your score.

  • Set yourself up for automated payments so you don’t need to remember each and every date of your payments.

  • Borrow within your means. Racking up high amounts of debt can look negatively on your bureau score. Avoid unnecessary credit accounts.

  • Avoid applying for credit unless you have a genuine need. Too many inquiries in a short period of time can sometimes be interpreted as a sign that you are opening numerous credit accounts due to financial difficulties, or overextending yourself by taking on more debt than you can actually repay. A flurry of inquiries will prompt most lenders to ask you why.

Let the JJ Mortgage Team help you on the right path. Contact us today should you have any questions or need advice.


Your best mortgage for your best life,


Jenny and Janna

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