Easiest Credit To Acquire When You Have Limited Or No Credit

Being a mortgage broker I have seen a lot of people with no credit, damaged credit or just starting to build their credit. It is never easy to build your credit when first starting out and it can sometimes take years to establish even a little bit of credit.
I will go over some of the best credit habits and how to obtain credit when first starting out, coming out of bankruptcy or building from damaged credit.

The only items that build your credit are credit cards, lines of credit, and loans. However, there are many items that can damage your credit such as any missed bill payment, usually missing two months in a row, or you may have missed one month, went a couple payments on time and then missed another. These will be noted on your credit bureau and lower your credit score.

The best credit guidelines are as follows:

Try to keep variable balances such a credit cards below 50% full. You don’t need to keep a balance on your credit card, it can be paid off each month.

Don’t miss any payments on your cell phone, credit card, cable or any other bills. Any missed payments can be noted on your credit.

Missing a payment or two in a year isn’t a big deal as long as it doesn’t happen often and you generally have healthy credit habits.

There is no need to pay down your loans unless you are paying them off, as banks debt service you for a mortgage based on monthly payments, not amounts owing on your loans.

Generally a bank would want someone to have a minimum of two sources of credit with a limit of $2000 or more each, established for two years or more.

Obtaining credit isn’t always easy, but the more credit you have the easier it can be to get depending on your income and debt level.

The easiest companies to get credit through can be the following:

Companies such as Capital one, Canadian Tire, President’s Choice, etc. These will be much easier than the big banks.

The main company I recommend is Affirm Financial, as they will normally approve you for a higher limit right away. Having a higher limit establishes your credit much faster as long as you treat it right.

Another strategy would be to get a car loan even if it is a high interest rate. This will help build your credit and then six months or so down the road you may be able to get a credit card. This timeline differs depending on the client.

Credit can be very tricky but each year the banks are making it more and more important when it comes to qualifying for any type of loan. Your credit situation will be unique to you but this blog gives you a basis to start from.

If you want to get a mortgage you will need credit. If you want to improve your credit and aren’t sure how to start then give me a call or email.

Matthew Jackson
250-826-3111
www.mortgageokanagan.com

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