Understanding your Beacon Score
The first thing most bankers look at in your credit bureau is your Beacon Score. This is a summary of your credit worthiness as determined by an automated system at the credit bureau. Many bankers rely heavily on this score for loan/mortgage approvals and the interest rate you qualify for.
If you want the best mortgage rate in Canada, you should plan on having a beacon score above 600. If you have a score over 750 on your credit bureau report and have investments in addition to your home, you will be able to choose from the best rates, products and terms. A beacon score over 750 is considered very-good.
If the beacon score on your credit bureau report is below 550, you will face an uphill battle to get a mortgage. This is considered a poor score. The interest rate is likely to be higher than normal, depending on your circumstances. A mortgage broker can help find a lender willing to offer a good interest rate if you have issues on your credit bureau report.
Credit Score Example:
Based on your credit profile data, this is a numerical depiction of your creditworthiness. |
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Based on your credit score, this is how you may be viewed from a lender's perspective. |
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What the codes mean:
Late payments on your credit bureau report show up as an "R" or "I" rating. The importance of the late payment shows up as a number from 1 to 9. A R1/I1 is the best rating. It shows that you have paid your bill within 30 days of the due date. An R2/I2 shows an uncaring attitude toward debts. If you have one or two, no one cares. However, if you have several of them, bankers start to get nervous. A rating of R9/I9 on your credit bureau report is as bad as it gets, other than a bankruptcy. Most lenders will not provide a mortgage with someone that has a current "9" rating. However, there is still hope. A good explanation combined with our recommendation to the right lender may do the trick.