Many people ask why they could not get a mortgage loan or why they are charged a mortgage interest rate which is higher than what their friends or neighbours are getting from the same mortgage lender.

The simple answer is bad credit.

You did not know that when you defaulted on a small bank loan years ago (which you have already forgotten) somebody had taken a permanent record of this incident - The Credit Bureau of Canada.

You did not know that when you are consistently late with your monthly credit card payment, a permanent record is being kept at the credit bureau.

The payback time is today when you are looking for a home mortgage or when you are trying to get the same best rate your credit-worthy friends are all getting at the banks.

It is therefore important that you check your credit report regularly, at least once a year or before you purchase a major items such as a car or a house.

You can call the two largest Canadian credit reporting agencies:

Equifax Canada Inc (Tel: 1 800 465 7166) and

Trans Union of Canada (Tel: 1 800 663 9980)

to get a copy of your free credit report. Or pay a small fee if you want to get the report on-line. Learn more on how to get your credit report and fix them whenever possible .......click

Errors may occur on your credit report because the Credit Bureau can make a mistake in wrongly identifying you for another person with the same name and with bad credit, or somebody misread a social insurance number or misread a hand-written application.

You should first fix your credit report and improve your credit score because this will save you thousands of dollars as you will be charged a better interest rate on your mortgage or other loans.

Remember on a 25-year $100,000.00 fixed rate mortgage, a half percent drop in interest rate will save you $9,173.82 in interest charges over the life of the loan.

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source: CMHC

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