Credit Scores

Getting Credit in a Soft Economy

Often our brokers will bring us deals that they feel should be easily done. Regardless of how straightforward the deal might appear, a credit check and signed application is still required. A signed application provides us consent to pull the credit bureau. It is more efficient to have all of the information at the beginning, however the remaining items can be obtained later.

The required information for the credit application process:

  • Full name
  • Address
  • Birthday or SIN
  • Employment info and income

 

The Story is in the Number

A credit score is a 3 digit number calculated from a data-rich credit report and is one factor used by lenders to determine your creditworthiness for lending and credit.credit-score

There are 3 types of credit: R I M

Revolving – Credit cards and lines of credit which provide a revolving balance

Installments – Car loans or payment plans that have set instalments

Mortgages – Lending on real estate

 

This credit report will show missed payments, revolving balances, credit limits, and if there are any liens or defaults. All of these things will be taken into account in the credit decision. A score of 650 is recommended, below 650, we need to look at why the reasons the credit is lower, however if there is a verified reason, credit may still be considered. Below 500 means there are serious credit issues, usually a bankruptcy or consumer proposal. A strong co-signer may be required regardless of how straightforward the deal may seem.

It is critical to discuss credit with your clients as part of the overall approach and to fully understand your client and their needs, so they can grow as well as you.