By Remitbee - Apr 6, 2022
Whether you are planning on renting a house or getting approved for a mortgage to buy your dream home in Canada, expect that the competition is going to be challenging. The Canadian housing market news shows that available listings in Canada are lower than the demand, and there have been slower and fewer home constructions in the country. Not to mention, there's an existing competition among home buyers and home renters, plus the increasing rent and mortgage prices of homes.
Suppose you are looking for houses for rent in Canada and be the most appealing renter in the eyes of the landlord whose home you want to live in. In that case, there are different ways you can stand out among the crowd as these prove that you are financially capable of paying for the rental fee and other costs in your rental home:
Whether you’re aiming to secure a home you want to rent or would like to get approved for a home mortgage application, another thing landlords, banks, and other financial institutions look into is your credit score.
A credit score is a three-digit number, usually between 300 to 850, representing the likelihood that you will pay your bills on time. There are no one-size-fits-all credit scores as there are various scoring models. Generally, the higher your credit score is, the better.
Your credit score is calculated based on your credit reports, including your payment history, the amount of your debt, and the length of your credit history. If you have a high score, you have been a responsible payer of your credit in the past, which will signal to lenders, creditors, and landlords that you can be trusted when it comes to paying on time.
Here’s an estimated overview of the impressions of each credit score range:
300 – 57: Poor
580 – 669: Fair
670 – 739: Good
749 – 799: Very Good
800 – 850: Excellent
Your credit score affects the likelihood of renting or buying the house you want. Lenders look at your credit score to determine if you are credible to get a mortgage for your home or if you are qualified to rent a home. Your credit score will be the basis of how much your mortgage can be. The higher your credit score is, the higher the mortgage banks can give you so that you can secure your dream home.
To qualify for the best available mortgage rates and rental homes in Canada, it is suggested that you have a credit score of 680 and above. If your score is around 650 and above, that’s fine, but it is best to reach at least 700 to get the optimal mortgage and interest rate you want and the rental home you prefer.
Other than your credit score, the following factors are also considered by a landlord or lender:
Don't lose hope if you have a poor credit score or don’t reach the credit score requirement to buy or rent a house in Canada. This is not a dead-end in your journey towards homeownership or rental in Canada. Here are some practical ways you can do to improve your credit score:
Pay your debt on time. If possible, it is recommended that you pay off all your balance each month.
Use your credit card wisely. As much as possible, try not to go over your credit card limit and spend only what you can pay back in a month. If you often max out your credit card, lenders and landlords may perceive you to be a great risk.
Limit your credit applications and/or credit checks. If you are new in Canada, it is recommended that you start off with a single credit card instead of holding multiple credit cards immediately. Then, make sure that you pay your single credit card’s balance in full each month on time.
Report any inaccuracies on your credit card report, if there are any. In rare cases, there could be error in your credit card and loan accounts. If not corrected, these may have a negative impact on your credit score. So, check if the date and amount of your payments are correct. You should also check if there are any transactions that have been credited to you that you didn’t make, as that could be a sign that someone’s using your card without your knowledge.
May these tips and information help you reach the credit score requirement for buying or renting a house in Canada. If you need help in currency exchange or sending money abroad, RemitBee is here to help. We guarantee you the best currency exchange and fast, online service you won’t get elsewhere.