Whether you are a First Time Buyer or looking for a Mortgage Refinance, you need to know about Credit Scoring

Matt Chan • September 5, 2012

Know and Understand Credit Scoring can save you thousands

As a mortgage professional, I look at a lot of applications and credit bureaus for both first time home buyers and for mortgage refinance applicants.  I am often surprised by how unaware we are of our credit scores.  Perhaps Credit Scoring should be part of the education we get in schools.  I really believe that it should be part of a General Money Management and Finance class to educate our children how important it is to have a good credit score and to understand the consequences if they don’t.

I recently wrote a two part series article on Credit Scoring titled “Credit Scoring and Why Should You Care” that is geared specifically for first time buyers and refinance applicants.  If you want to know more about credit scoring, the articles will answer a lot of your questions.  The articles can be found here:

Part 1:

Part 2:

When you apply for a mortgage for either a purchase or refinance, banks always want to see what your credit looks like.  You should regularly check your credit score at least once a year.  There are services out there that can alert you of any major changes to your credit.  If you are interested in obtaining a copy of your credit, you can order one directly from the two main credit reporting agencies in Canada: Equifax and Transunion.

The reason why I suggest regularly checking your credit score is for the following reasons:

1) Ensure it is accurate and there are no surprises.

I remember I worked with a First Time Buyer a few years ago and when we talked about his credit bureau, we discovered a $5,000 balance on his Visa that he wasn’t aware of.  Long story short: someone had fraudulently put a charge on his card and he was not aware of it.  He did contact Visa and due to the length of time that the balance was outstanding, he had to make a settlement with them.

2) Ensure you are on track to repairing your credit

This is geared more specifically to those who are looking to repair their credit.  If you are a first time buyer and was recently turned down for a mortgage because of your credit, you need to have a plan in place to ensure that you are on track to getting your credit back on track.  This also applies if you have either recently refinanced or are looking to refinance your home.  If you recently refinanced your mortgage to consolidate your debt, you want to ensure that you are getting back on track to repairing your credit so that you are in the best possible position when your mortgage is up for renewal.  If you are looking to refinance and have been recently declined for a mortgage, you need to ensure you are on track to repairing your credit so that you are in a position to refinance in the near term.

The key here is to have a plan.  Although the exact formula for credit scoring is not public, there is enough public information out there for you to work with to ensure you can have great credit.  Start today and build on your credit with small steps.  Over time, all the little things add up.

If you have any questions, please feel free to contact me.

Good luck!

 

Matt

CONTACT

Share

RECENT POSTS

Going Through a Divorce? Don’t Let Your Credit Take the Hit

By Matthew Chan • July 22, 2026
Going Through a Divorce? Don’t Let Your Credit Take the Hit Divorce is stressful enough without adding financial fallout to the mix. Between lawyers, paperwork, and emotional strain, it’s easy to overlook how a separation can impact your credit. But your financial future depends on protecting it now—because long after the dust settles, a damaged credit score can linger. Here are a few smart steps to help keep your credit strong and your finances steady as you move forward. 1. Take Control of Joint Debts When it comes to joint debt, both parties are equally responsible—no matter what your divorce agreement says. If your ex misses a payment on an account with your name attached, your credit takes the hit too. Go through all joint credit cards, loans, and lines of credit. Wherever possible: Close joint accounts to stop future shared use. Transfer balances to the person responsible for repayment. Notify lenders in writing of any changes to account ownership. Once everything is updated, pull your credit report after three to six months to confirm all joint accounts have been closed and reporting correctly. Mistakes happen—stay proactive to prevent surprises later. 2. Open Your Own Bank Accounts Separation means financial independence, and that starts with your own banking. Open a new chequing account in your name only and redirect your pay deposits and bill payments there. At the same time, close any joint bank accounts and change passwords on existing online banking and credit profiles. Even in peaceful separations, shared access can cause confusion—or conflict. Protect yourself by ensuring your money and information are secure. 3. Start Building Credit in Your Name If most of your past credit was tied to your spouse’s name, now’s the time to establish your own. Apply for a small personal credit card or secured credit product . Use it sparingly and pay it off in full each month. This helps you build a solid individual credit history, setting the stage for future goals like buying a home, refinancing, or starting fresh financially. 4. Keep an Eye on Your Credit Monitor your credit report regularly for errors or unexpected changes. You can request free reports from both major credit bureaus in Canada— Equifax and TransUnion —once a year. Tracking your credit isn’t just about catching mistakes; it helps you see your progress as you rebuild your financial independence. Final Thoughts Divorce can be emotionally draining, but protecting your credit doesn’t have to be complicated. By taking a few careful steps now—closing joint accounts, building credit in your name, and monitoring your reports—you’ll safeguard your financial health and gain peace of mind as you start your next chapter. If you’d like personalized guidance on managing credit during or after a divorce, reach out anytime. I’d be happy to walk you through your options.

Bank of Canada Holds Rate at 2.25% — July 15, 2026

By Matthew Chan • July 15, 2026
The Bank of Canada announced today that it is holding its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. The tone of today's announcement is notably more optimistic than previous months. Here's what's changed and what it means for you.

Tips to Pay Off Your Mortgage Early

By Matthew Chan • July 8, 2026
Owning a home feels great—carrying a large mortgage, not so much. The good news? With the right strategies, you can shorten your amortization, save thousands in interest, and become mortgage-free sooner than you think. Here are four proven ways to make it happen: 1. Switch to Accelerated Payments One of the simplest ways to reduce your mortgage faster is by moving from monthly payments to accelerated bi-weekly payments . Instead of 12 monthly payments a year, you’ll make 26 half-payments. That works out to the equivalent of one extra monthly payment each year, shaving years off your mortgage—often without you noticing much difference in your budget. 2. Increase Your Regular Payments Most mortgages allow you to boost your regular payment by 10–25%. Some even let you double up payments occasionally. Every extra dollar goes directly toward your principal, which means less interest and faster progress toward paying off your balance. 3. Make Lump-Sum Payments Depending on your lender, you may be able to make lump-sum payments of 10–25% of your original mortgage balance each year. This option is ideal if you receive a bonus, inheritance, or other windfall. Applying a lump sum directly to your principal immediately reduces the interest charged for the rest of your term. 4. Review Your Mortgage Annually It’s easy to put your mortgage on auto-pilot, but a yearly review keeps you in control. By sitting down with an independent mortgage professional, you can check if refinancing, restructuring, or adjusting terms could save you money. A quick annual review helps ensure your mortgage is always working for you—not against you. The Bottom Line Paying off your mortgage early doesn’t require a massive lifestyle change—it’s about making smart, consistent choices. Whether it’s accelerated payments, lump sums, or regular reviews, every step you take helps reduce your debt faster. If you’d like to explore strategies tailored to your situation—or want a free annual mortgage review—let’s connect. I’d be happy to help you find the fastest path to mortgage freedom.