Other than the credit score, certain other factors also come into the picture when it comes to applying for loans to buy a home in Canada. These include your credit report and employment record. The former is a detailed report containing information related to the use of your credit products. All the bill payments you have made including missed and late ones are mentioned in this report. Furthermore, if you have ever become bankrupt previously, it will also be listed in this report.
On the other hand, employment record is asked by the lenders to ensure you have a steady employment. Gross income is also accessed to make sure that you are making enough money to pay the installments easily.
In case you are self-employed, lenders may check your tax returns from last two years.
Home Buying Options for People with Bad Credit Score
Having a bad credit score narrows the chances of buying a home in Toronto or any other city of Canada; however, it doesn’t completely eliminate the possibility. There are certain options such as no credit check loans and bad credit loans, Toronto that may come to your assistance.
It is important to know that banks do not facilitate the clients with low credit score. Therefore, you need to depend on private lenders, credit unions, trust companies etc. for obtaining loans, Toronto. No credit check or bad credit loans, these loans are given to the applicators on different terms and conditions. Their interest rates are different (typically higher) than the regular cases.
All in all, the ideal scenario is to maintain a good credit card score. Try to aim at the excellent category so that no problem could surge up when you are planning to buy your home in Canada. In case, your credit score is dipping, just follow these simple yet effective tips to improve it:
• Use a secured credit card instead of an unsecured one.
• Pay your debts before the due date. Not paying them will also accumulate interest that will make it even more difficult to pay the debts in the later stages.
• Be punctual with your bills. Make sure you are paying them on time and in full. Making partial payments won’t do any good for you since the interest will keep accumulating on the remaining amount.
• Applying for a new credit when your credit score is already dipping is a big mistake.
By following these simple tips, you will be able to improve your credit score and apply for a loan to buy a home in Canada.