Almost everyone needs to take out a mortgage to afford their property, whether it's a piece of residential Edmonton real estate or a shop. Anyone can apply for a mortgage but not everyone is approved. This is because banks judge borrowers based on how much risk they pose of not being able to pay. One of the factors they use to decide whether you're worthy or not is your credit score. If you want to be approved, we can teach you how to get your credit score, understand what it means, and improve it if the bank feels it's not up to snuff.

Credit scores are just a rating system. They measure how worthy a person is of receiving credit, much like your SAT scores represent how worthy you are of attending university. The scale runs from 300 to 850. The higher your score is the less risk you pose, and the more likely it is that a commercial mortgage company will approve your application. Lower scoring people may also be approved, but the higher your score the better your loan terms will be.

Credit companies calculate your score by collecting data about your borrowing history and plugging your actions into an algorithm developed by a company called FICO. Therefore if you don't have much history with credit, your score will be low. Some of the things credit companies consider are your bill payments (did you pay for your vacuum truck services on time?), how much of your credit limit you use (do you pay off your balance in full or only make minimum payments?) and how often you go searching for new credit (which indicates you're not managing your existing credit wisely).

You can check your credit score yourself before you go applying for mortgages. Commercial firms on the internet will offer to get them for you, but you can also go directly to the three American companies that generate scores: Equifax, Transunion, and Experian. You don't know which one a bank will consult, so check all three. They may be slightly different. You're entitled to check each one once a year for free. You can get your free reports by visiting www.annualcreditreport.com.

If your credit score isn't as good as you would like, there are a number of things you can do to fix it. Firstly, you must pay all of your bills on time and in full, and continue to do so. That means the Oakville dentists you stiffed as well as your phone bill and credit cards. You should use your credit card regularly but not excessively and pay your balance off in full at the end of each month. You should also use several different types of credit (i.e. store account, credit card, car loan) and manage them all properly.