Credit Myth vs Reality Credit Score Credit Recovery and Mortgage Approval in Canada
Credit score concerns stop more Canadians from buying a home than almost anything else and in most cases it is because of a credit myth that simply is not true.
I speak to buyers all the time who say they are going to wait until their credit is perfect or that they need to pay off everything before even talking to a broker. While that sounds responsible it often leads to unnecessary delays sometimes years when homeownership could have been possible much sooner with the right guidance.
The Most Common Credit Myth I Hear
One of the biggest credit myths is that you need perfect credit to qualify for a mortgage. In Canada that is not how lending works.
Yes your credit score matters but it is not the only thing lenders look at. Most lenders are far more interested in how you manage credit than whether your score is flawless.
In general terms
A credit score around 680 can still qualify for solid mortgage options
A score of 720 or higher usually opens the door to the best rates
A perfect score is nice but it is not required
What lenders really want is consistency and predictability.
Why the Number Alone Does Not Tell the Full Story
Your credit score is just a snapshot. It does not explain why your score is what it is or whether your habits are improving.
Lenders look closely at
Your recent payment history
How much of your available credit you are using
Whether your balances are going down or up
How stable your credit behaviour has been over time
This is why two people with the same credit score can have completely different mortgage outcomes. One file tells a strong story. The other raises concerns.
The Truth About Collections and Credit Recovery
Another damaging credit myth is believing that paying off collections immediately fixes your credit. In reality credit recovery is about strategy not speed.
In some cases
Paying a collection can temporarily lower your credit score
Older issues may matter less than recent missed payments
The way you handle repayment can affect how lenders view risk
This is why credit recovery should be planned carefully especially if buying a home is your goal in the near future.
Credit Recovery Is About Progress Not Perfection
Lenders understand that life happens. Divorce illness job loss and other challenges show up on credit reports every day. What matters most is what happens after.
Positive signs include
On time payments over the last 12 to 24 months
Lower credit card balances
Fewer new credit applications
Stable financial behaviour
Even with past credit issues many buyers can still qualify when recovery is clearly underway.
Why Talking to a Broker Early Matters
Applying for a mortgage without understanding your credit profile can do more harm than good. Every application creates inquiries and repeated declines can slow your progress.
A mortgage broker can
Review your credit before you apply
Identify which lenders fit your situation
Help structure credit recovery properly
Prevent unnecessary declines and delays
Final Thought
The biggest credit myth is believing you need to fix everything before having a conversation. Most buyers do not need perfect credit. They need the right plan.
Ready to Take the Next Step
Contact Mortgage Broker Keisha Johnson to start your credit recovery journey.
Email kj@rtsmortgagefinancial.com , 647 580 7421 or book an appointment today using the link below.
You can easily see my real-time availability and schedule time with me at https://calendly.com/rtsmortgagefinancial