Friday, December 12, 2008

Q&A: Improving Your Credit Profile

I just received the following e-mail from an interested real estate investor about credit. I thought others might find the information useful so I am posting the Q&A...

Question: "As a mortgage broker are you looking at credit cards and there balance? The reason I'm asking is that I have 7 credit cards. Over the years company's just give them to me..I don't have a balance on any of them. And I only use 3. I have a high credit limit on them.

I"m just wondering when I go to apply for a mortgage are those card going to look bad and I might not get approved because I have them?

I'm try to get my application together so when I find my investment property I will not have a problem getting a mortgage.

Do you think it's a good idea to close those accounts? and will closing those accounts has an effect on my credit report?

Answer: "I would definately NOT close the accounts. Closing accounts will probably reduce your credit score. Do you know what your credit score is? I would recommend going to www.equifax.ca and checking your score on line for around $25. If your score is 680+ then you are fine. Keep the balances on your cards as low as you can and don't apply for any more cards unnecessarily. If you have no balance on your cards then it won't affect the debt service ratios with any of my lenders"

Do you have a mortgage question. Feel free to contact me by email or by phone.
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