Credit score required to get your loan approved
If you are living in a rented accommodation facility at present and paying regular rent to your landlord, you should seriously start thinking about taking a loan in your name to buy a home for yourself. The reason is that the rent that you pay to your landlord helps him to pay his mortgages. Instead, you can strike out on your own and start paying mortgages yourself rather than rent.
There is a certain criteria which you need to meet before your application gets approved. Your credit score plays a very important role in determining whether your loan will get sanctioned or not.
What is a good credit score in Canada?
The credit scores in Canada generally have a range of 400 to 900. It is always better to have a high credit score because it increases your chances of getting a loan from traditional lending sources like banks. A credit score between 660 and 725 comes under the category ‘good’. If you have a credit score between 725 and 760, it is considered to be ‘very good’. Anything above 760 is the best case scenario and is deemed ‘excellent’.
Credit score for a home loan
The credit score takes into account your credit history which helps in determining the interest rate that you will charged if your application gets approved. A higher credit score leads to a favorable and affordable interest rate. It has been observed that a credit score of 725 or higher is the best option because you can get the lowest interest rate on your loan. This way you can save a lot of money in the long run.
How to improve your credit score?
You need to check your eligibility before applying for a loan otherwise your credit score can go down if your application gets rejected on the grounds of non-eligibility. To improve your credit score, you should start clearing off your old debts. You should stop the use of credit cards and go for debt consolidation. You should be careful not to miss payments and you should check your credit report for discrepancies. Gradually your credit score will improve. Once you reach a good credit score, apply for a loan according to the procedure. You can also apply to online lending companies to get a loan sanctioned quickly.
All these tips can go a long way in helping you to get your own home in a short time.
With happy loan we don’t look at your credit score. Bad Credit is Ok. We understand issues and help solve your problem.