When applying for a mortgage in Canada, your credit score can make or break your approval — and greatly impact the interest rate you’re offered. Whether you’re buying your first home or refinancing, understanding how credit scores work gives you a major advantage.
At InBudget Mortgage, we guide clients through every step of the mortgage process — including improving their credit before applying. Here’s what you need to know.
📊 What Is a Credit Score?
A credit score is a three-digit number that represents your creditworthiness. In Canada, credit scores range from 300 to 900, and are calculated by credit bureaus like Equifax and TransUnion based on your financial history.
What Affects Your Credit Score?
Payment history (35%)
Credit utilization (30%)
Credit history length (15%)
New credit inquiries (10%)
Credit mix (10%)
🔎 Why Credit Scores Matter for Mortgages
Mortgage lenders use your credit score to determine:
Whether you qualify for a mortgage
What interest rate you’ll pay
How much you can borrow
If you’ll need mortgage default insurance
The higher your score, the lower the risk — and the better your chances of securing a low-interest mortgage.
🏠 What Score Do You Need for a Mortgage in Canada?
Here’s a general breakdown:
| Credit Score | Approval Chances | Notes |
|---|---|---|
| 760+ | Excellent | Best rates and options available |
| 700–759 | Very Good | Strong chance of approval |
| 660–699 | Good | May get approved but limited options |
| 600–659 | Fair | High-ratio mortgage with insurance required |
| Below 600 | Poor | Likely need a private lender or co-signer |
✅ At InBudget, we work with both A lenders and alternative lenders, giving you more options — even with less-than-perfect credit.
🛠️ How to Improve Your Credit Score Before Applying
Pay bills on time — even minimum payments
Keep balances low — under 30% of credit limit
Avoid opening new credit lines right before applying
Check your credit report for errors and dispute them
Use old credit cards occasionally to keep them active
💡 Give yourself 3–6 months to improve your score before applying for a mortgage
🧠 What If You Have a Low Credit Score?
Don’t panic — there are still options:
Apply with a co-signer
Use a larger down payment
Work with a broker like InBudget to access B-lenders or private options
Explore credit improvement plans we can help guide you through
💼 Why Work with InBudget Mortgage?
At InBudget, we help you:
Understand your credit situation
Match with lenders who accept your profile
Get pre-approved for a mortgage that fits your needs
Improve your credit score for better rates in the future
👉 Ready to BOOST your credit score?
Contact InBudget Mortgage today for a free consultation and personalized tools to improve your credit score with NO stress.