Understanding your credit report is paramount when navigating the mortgage landscape in Ontario, Canada. As a seasoned mortgage professional, I’m here to shed light on the key aspects.

1. Obtain Your Credit Report:
Start by obtaining a copy of your credit report from major credit bureaus such as Equifax and TransUnion. In Canada, you’re entitled to one free credit report per year

2. Examine Your Credit History:
Review your credit history, which includes details about your credit accounts, payment history, and outstanding balances. Identify any discrepancies or errors that may impact your credit score.

3. Understand Credit Scores:
Familiarize yourself with your credit score, a numerical representation of your creditworthiness. In Canada, credit scores typically range from 300 to 900, with higher scores indicating better creditworthiness.

4. Factors Influencing Credit Scores:
Understand the factors affecting your credit score, including payment history, credit utilization, length of credit history, types of credit, and recent inquiries. Timely payments and responsible credit use positively impact your score.

5. Addressing Negative Items:
If there are negative items on your credit report, such as late payments or collections, develop a plan to address and rectify these issues. Timely resolution can positively impact your creditworthiness over time.

6. Debt-to-Income Ratio:
Evaluate your debt-to-income ratio, as lenders often consider this when assessing your mortgage eligibility. Lowering existing debts before applying for a mortgage can enhance your financial profile.