Ah, the credit rating. One of the most important financial lifelines you can have and that can make the difference between approval or rejection of various credit products.
While a high credit rating is definitely not the only thing you need to get ahead in life, especially when you’re a homeowner, it’s always a good idea to keep a watchful eye on it. A question that many potential property buyers are concerned about is what constitutes a good credit rating. And what is the minimum credit rating required to obtain approval for a mortgage in Montreal?
If you are reading this article, you probably have some idea of what a credit score is and the benefits that a high rating can have. For those of you who don’t know your credit score, it is a three-digit number that is a cumulative average of all your credit-related activities. In Montreal, credit scores range from 300 to 900. The chances of being approved for different loans and other credit products increase as you score get higher. For example, if your rating is 650 or higher, it’s considered good and means that you have a low risk of default and are a better candidate for a loan. If your credit rating is 750 or higher it’s considered excellent. In many cases, a minimum rating of 680 is required for mortgage approval by most prime lenders, such as banks and other traditional financial institutions.
Unfortunately, a credit rating of 600 or less is considered low, which means that you are too high a risk for lenders. Many lenders, including banks, have strict rules about who they consider to be eligible for a mortgage. For example, if your credit rating is less than 600, you must apply to a different organization. Or, if you can, it’s not a bad idea to simply wait until you can improve your rating.