Qualifying with Damaged Credit
 January 19 2016     Posted by Siemens Group

Most major lenders have strict requirements for the minimum credit score that applicants must have to qualify for their products. This means that applicants with damaged credit are frequently declined by their bank; however, we can help to find financing solutions to allow you to purchase a new home.

We have access to a number of lenders with programs for borrowers who have damaged credit, and we also work with several private lenders who provide secondary financing to borrowers with damaged credit. The pricing for alternate or private lenders is higher than pricing for mortgage financing through one of the major lenders; in addition to higher interest rates, there are usually up-front fees that are calculated as a percentage of the mortgage amount. Nevertheless, these products can help in the short term by providing financing while you re-establish your credit.

Our services go beyond only arranging financing for buyers with damaged credit. Our team has significant experience working with applicants with damaged credit, and we can provide advice regarding the factors that go into your credit score, in order to put you on track to improving your credit. Our top tips for ensuring your credit score improves are:

- Ensure you make at least the minimum payment on all of your credit facilities on the debt, and make it on time. This is the single most important step to rebuilding your credit.
- If you have recently declared bankruptcy, you may find it challenging to obtain any credit facility with which to start rebuilding your credit. If this is your situation, we recommend obtaining a pre-paid credit card. Because with a pre-paid card you put down a deposit equal to your credit limit, lenders may grant a secured credit card to a borrower to whom they would not extend unsecured credit. This provides a starting point from which to rebuild your credit.
- Don’t use more than 2/3 of the credit limit on any revolving credit facility
- Minimize the number of credit applications you make. Multiple views of your credit bureau by different potential creditors will negatively affect your score.
- Ensure that you have at least some credit. Many people who have gotten themselves into trouble with credit in the past avoid using credit, and prefer to use cash or debit cards. This prevents them from rebuilding their credit score.

Click here to read a great information piece about credit from the Financial Consumer Agency of Canada.