Recently I had a client who was looking to lease a condo downtown. He told me he would prefer to buy but has bad credit and … “will be a renter for life.”
I have nothing against renting and in some cases it might be better but if you have a desire or even a curiosity about being a homeowner, you need to explore that, know our options and educate yourself on what you should be doing now to become a homeowner in the future.
That night when I got home, I played the conversation over and over again in my head. So, the next day I sat down with our Mortgage Broker, Steve Bourne of GTA Mortgage Brokers, and told him the story. He gave me some great tips which I would love to share with you all.
Steve’s Advice on How to Fix Your Credit Score:
The good news is that we can all take positive steps to repair our credit and no one should feel that they are destined to “rent for life”, unless of course, they wish to.
Here are some proven tips designed to help individuals looking to repair their credit:
- Everyone’s situation is unique – the first step is to consult with a professional (mortgage broker, financial advisor) for advice tailored specifically to your situation
- Start by reducing your debt – pay down any credit cards and loans
- Pay your highest interest debt off first – usually credit cards
- Make more than the minimum payment each month – if your cash flow is tight be sure to make the minimum payment – do not miss a payment and avoid late payments
- Avoid high credit utilization – constantly maxing out all sources of credit has a negative impact on your credit score
- Lenders like to see at least 2 trade lines (credit card, loan, secured or unsecured debt, lease or car payment) on your credit bureau with very low or declining monthly balances showing your responsible use of credit
- Debt consolidation – work with a professional to review and restructure your current debt load into more manageable, lower interest payments
- Live within your financial means – eliminate discretionary spending and stick to a reasonable budget
Following these simple and straight forward tips will enable the individual to gradually repair their credit and greatly improve their overall financial picture.
Thanks Steve for your tips and advice, I was able to let my client know he could repair his credit and better yet, become a property owner!