Don’t apply for credit when you need it

During the past week, I’ve encountered mortgage applicants telling me that they never applied for credit since they never needed it.  They’ve always had enough cash to meet their day-to-day requirements.  Unfortunately, now that they are applying for a mortgage, they have no credit.  With no credit, it becomes very difficult for lenders to judge whether an applicant is responsible in handling credit.  While it is still possible to obtain a mortgage without a credit history, it will be more expensive for the borrower since lenders will charge a higher interest rate to cover for the risk.

We never know when we will need credit.  Things happen that we don’t anticipate such as a family emergency or medical bills.  Don’t wait until you need credit to apply for it.  You may not get it.  We should always have credit available to us and our spouses/partners.

Once in a while, get a copy of your credit bureau.  Check it’s accuracy.  If your score is low, improve it.  I can suggest ways for you to improve your credit score.  You can obtain a copy of your credit score online at www.equifax.ca and www.tuc.ca