Credit Killer - Don’t let these 5 things stop you from getting your next home.

Author: Kristi Sauter |

Blog by Trilogy Mortgage Corporation

Spring has Sprung and if you are thinking of purchasing a home this year there are a few things to keep in mind, more specifically Credit Killers. First let’s unpack what credit killers are. They’re things we do that have an impact on our credit or our ability to borrow money. Some of them are fairly obvious, while others may come as a surprise.

Credit Killer Number 1 – Unpaid credit cards

This one may seem obvious, but it can play a massive role in whether or not you qualify for a mortgage. If you currently owe too much consumer debts and have a history of racking up those cards and only making the minimum payments, lenders in this economy will be leery about lending you more money. My advice – pay down those cards and try to keep the amount of credit you owe to as few cards as possible.

Credit Killer Number 2 – Defaulting on loans

Student loans, vehicle loans or lines of credit. It’s important that you keep up with your payments or your borrowing behaviour could be viewed as risky. We know things happen, however as a general rule, paying back your loans in accordance with your agreement will bode well when it comes time to apply for a mortgage.

Credit Killer Number 3 – Inconsistent job history

So, this one is a little different. It’s not that it necessarily impacts your credit per say. However, having inconsistent employment gives the perception that you might have an issue with debt repayment. If you are constantly “between jobs” lenders could view this as possibly running into problems with repaying the loan.

Credit Killer Number 4 – Cell phone bills

It’s a common misconception that cell phones don’t play a part in your credit history. However, like other bills, if cell phones go unpaid for an extended period, they absolutely can be a credit killer.

Credit Killer Number 5 – Not checking your credit score

Now this one more than anything is a way to ensure there hasn’t been any incorrect penalties to your credit score. These can happen by accident sometimes, for example an account has been in incorrectly associated with your name. So it’s important that a clerical error is addressed early so that when it comes time to apply for a mortgage there are no issues.

Right now lenders are being increasingly particular about whom they lend funds too, so its extremely important to ensure you have done whatever you can to put yourself in the best financial position possible.