Short answer
Most A lenders in Canada want a credit score of about 680 for the best rates. You can still get a mortgage in the 600s through alternative lenders, and equity-based private lenders will look at scores in the 500s. Score is only one factor alongside income, debts and the property.
The tiers, roughly
680 and above. A lenders, the banks and main monoline lenders. Best rates and the widest choice.
600 to 679. Possible with A lenders depending on the rest of the file, and comfortable with B lenders. Expect a small rate premium.
Below 600. Alternative and private lending territory. Rate premium and usually a lender fee, but real options if you have equity.
What actually moves a score
- Payment history, about 35%. One missed payment hurts more than most people expect.
- Utilisation, about 30%. How much of your available credit you are using. Under 30% is the target.
- Length of history, about 15%. Old accounts help, so closing your oldest card is usually a mistake.
- New credit and mix. Several applications in a short window looks like stress.
The fastest legitimate fix
Pay balances down below 30% of each limit. Utilisation updates monthly and it is the fastest lever there is. A card sitting at 90% can cost you 40 to 80 points on its own.
Do not close old accounts, and do not apply for anything new in the six months before you buy.
What a low score does not mean
It does not mean no. It means a different lender and, usually, a plan to get you back to an A lender at renewal. If you have been declined, that was one lender’s rules rather than a verdict.
If credit has been getting in the way, would it help to find out what you could actually qualify for?
General education, not financial advice. Figures are illustrative and subject to lender approval (O.A.C.). Lora Fenn, Mortgage Agent Level 1, Lic. #M25003153. Dominion Lending Centres YBM Group, FSRA #11129. 705-881-2780 · lfenn@dominionlending.ca
Leave a Reply