Alright...this comes a day earlier than I was going to post it...that's because I plan on being extraordinarily selfish tomorrow...I'm going to sleep in and then eat a Huge Breakfast...go wash my car - and then do as little as possible with the rest of my day...and then - I'm off to see CAPTAIN AMERICA - The Winter Soldier!
Getting back to the subject at hand though - I thought it might be nice if people had a better idea of just how this whole "Mortgage Thing" came together. There is a formula...based on 4 Basic Criteria - and I'm gonna share it with you...but not to the point of overwhelming you - that would suck and nobody wants that.
The FIRST, and in my opinion the Most Important, of these Criteria is CREDIT.
Credit is much more than a simple Credit Score, an R9 or an I9 or that you have a credit card. When we look at CREDIT - we are looking for much more than you would expect.
First of all, we want to see a MINIMUM of 2 years of Established Credit History. That is to say we want to see you have Credit in some capacity reporting for at least 2 years. But we don't stop there. We look in to Insolvency (Bankruptcy, Consumer Proposals, Collections, Judgements, etc...)
We also look for at least 2 pieces of Credit. So a Credit Card and a Car Loan, or a Student Loan and a Line of Credit, etc. The key here is 2 pieces is usually a must. There is a such thing as "Alternative Credit" - but that's better left to a one on one discussion with your broker if that's what you require...usually acceptable if a person has an "Absence of Credit" - as in NO CREDIT AT ALL - EVER!
Credit Scores are fantastic...but they are fallible. They look at everything from Duration of Credit, Debt Limits, Types of Credit (Revolving or Instalment), Payment History, etc. Credit scores change every time you do something to effect it. Make a payment, miss a payment, inquire...the list goes on and on - and your score could easily be impacted either positively or negatively.
Getting Credit is hard enough - Maintenance of Credit is even harder. In today's world, Credit is the Currency that Banks and Lenders consider.
A good rule of thumb you can use when managing your credit is to keep your Balance at or below 70% of the Actual Limit...for what ever reason - it just works great and your credit score will be excellent! So if you have a $10,000.00 Master Card - do your best to stay at or below $7,000.00 as a balance. Lower of course is better.
That's it for today! We'll kick out the next of the Big 4 Next week...INCOME/EMPLOYMENT. That's a real doozy!
Thanks for Reading.
...I really can't wait to see this movie!!