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Credit on the Slide

You do everything you can to ensure your mortgage payments are made on time. So why is your credit score slowly getting worse? If you’re like many Canadians, it’s because your overall debt is climbing, and you don’t pay as much attention to those other loans. Canada has the highest level of household debt to disposable income in any G7 country according to Statistics Canada.

Non-mortgage Debt on the Rise

On average, Canadians owe $1.85 for every dollar of household income. This debt often comes in the form of credit cards, car payments, and installment loans. We tend to see these loans as easier to walk away from because there are fewer immediate consequences to defaulting. However, with every missed payment or defaulted debt, your credit score takes a hit.

What’s more, if you’re only making the minimum payment on your loans, you’re accruing interest that will take you years to pay back. Credit card companies are required to show you how long it would take to pay off your current balance if you only make the minimum payment each month. If you’re in the habit of just tossing your statement aside after looking at the amount due, take a closer look; you might be surprised!

Your Credit Score Still Matters

Even if you already have a home and a mortgage in place, your credit score still matters. When it’s time for you to renew your mortgage, or if you need to refinance, you’ll have fewer options with bad credit. Being responsible with your current mortgage payments is certainly an important factor that lenders consider. But your overall financial health also needs to be strong to qualify for the best products.

In cases of bad credit mortgages, at Auxilium we often do a two-step mortgage process. We start with a short-term mortgage with one lender just to get you into the market and re-established. Typically, a year or so later, we’ll look at refinancing your existing mortgage with one of our “A” lenders.

If you are in a situation where you’re worried about your credit score, our team is experienced in dealing with bad or bruised credit. While the solution may not be straightforward, if there is a chance, we will find it for you! The Auxilium Team offers a complimentary consultation to start your home buying process; contact us today at 250-590-6520 (toll-free 1-855-590-6520). You can also visit us at #16-Unit 211-2840 Peatt Road during regular business hours Monday through Friday 8:30 a.m. – 5:00 p.m. We can also arrange an appointment evenings or weekends to work with you.

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