There are many perceptions about a credit score, but the most widely accepted view is that it is more than just a number; it is your ticket to better mortgage rates and approval. Many Ontario homebuyers don’t realize how much their score affects their options until it’s too late.
However, there is good news! Even if your score isn’t perfect, there are smart ways to improve your credit scores before applying for a loan.
In this blog, we will provide key steps to build your score and secure a mortgage approval for your dream home.
The 3 Biggest Credit Score Killers That Lenders Notice
Before fixing your credit score, you need to know what’s hurting it. Mortgage lenders pay attention to more than just the number; they also look into your credit report. Here are the top three red flags:
- High credit utilization: A maxed-out credit card makes lenders nervous. Keeping balances below 30% of your limit can instantly help.
- Late payments: Even one missed payment can lower your score and impact mortgage interest rates. To avoid this issue, set up automatic payments.
- Too many credit inquiries: Each credit score check from a lender can slightly lower your score. Avoid applying for new credit cards or loans before your mortgage pre-approval.
Understanding and steering clear of these mistakes can help you take action before applying for a mortgage loan.
The 90-Day Credit Repair Challenge
Most homebuyers wait too long to focus on credit repair. Below is a step-by-step 90-day action plan to boost your credit score before applying for a mortgage.
- Days 1–30: Check your credit report for errors and correct any mistakes. It is also important to pay down high credit balances.
- Days 31–60: Negotiate with creditors to remove old collections. Be certain to ensure that all bills are paid on time.
- Days 61–90: Stop applying for any new credit. Keep spending low and conduct a regular credit score check for improvements.
Following this timeline can lead to real improvements in your mortgage pre-approval chances.
What Mortgage Lenders Won’t Tell You About Credit Scores
Lenders don’t always share the full picture when it comes to your credit score. For example, did you know that having a high income won’t automatically compensate for a lower score? Or that closing old credit accounts can actually hurt your credit report instead of helping it?
Many lenders also use their internal scoring models, which means your score might look different depending on where you apply. Additionally, some lenders weigh credit activity more heavily than older history, which may impact your mortgage approval in unexpected ways.
However, not all lenders judge your credit score in the same way. Some focus only on your score, while others consider your full credit report, including your payment history and debt patterns.
The better you prepare, the better your chances are of securing favourable mortgage interest rates.
Why Working With a Mortgage Broker in Ontario Improves Approval Chances
Applying for a mortgage by yourself means accepting whatever terms a single lender offers. However, a mortgage broker in Ontario does more than just compare rates; these experts can help you improve your credit score.
At Northwood Mortgage, we don’t just find you a lender; we guide you through credit repair strategies like reducing debt and correcting errors on your score report. Our brokers also teach you how to optimize your financial profile for the best mortgage approval chances.
With access to over 50 lenders, including banks, credit unions, and private institutions, we connect you with those who offer competitive mortgage interest rates.
Even if your credit score is not perfect, we will remain steadfast in our goal to get you the best term for your situation.
2025 is filled with opportunities—do not let a low credit score weigh you down! Call Northwood Mortgage today at 888-495-4825 or contact us online to speak with one of our expert brokers and find the perfect mortgage loan for your needs.
