Vancouver Mortgage Broker Aleem Peermohamed explains your credit score and gives you tips on how to improve your credit

1. Hello everyone
Aleem Peermohamed from the Mortgage Specialist.com . In today’s episode of Mortgage Minutes I’d
like to talk about credit, more specifically someone that doesn’t have any reported credit score.
I recently had a client call me this week who has a lot of assets. He owns and operates two different
companies. The companies (but not him) have fantastic credit and several hundred thousand dollars in
liquid cash.
Now, before he was referred to me he went into his bank, where he had been a solid customer for
many years. But his banker looked at him and said “I’m sorry, we can’t help you. You don’t have a credit
score.” He reaction was “Why not? I’ve got all these assets.”
Well, assets don’t have an effect on your credit score. It doesn’t matter if you have $10 million in the
bank, it will not impact your credit. The credit bureau is about evaluating your credit.
What creditors want to see is that you know how to manage monthly obligations, without missing them
or falling into arrears or worst of all getting write-offs.
If you have been paying cash all along and never had the need for any credit, although this is
commendable and a rarity in Canada. Unfortunately, it’s not great for borrowing because you have no
proof that you have a capacity to make payments or to manage a debt at all even though you’ve
managed your savings fantastically.
How do you get out of this trap?
First off, go and get a credit card. If you’ve got good assets and you’ve been paying everything with cash
then your credit score will be nil for the most part. Apply to get a Visa. Start with that. Do you have to
use it all the time? Not necessarily. Use it from time to time, make sure you pay it off. Try to keep that
limit over $1,000, though. Ideally you want to get up over $5,000 because when the credit lenders look
at you, especially if you’re applying for a mortgage, they want to make sure you can handle a payment
that’s more than $50 a month.
If you’re looking to build and establish credit start with one card. You might want to get a couple. Don’t
go crazy. 10 of them is not better than three or four and it just has more chances that one of those
payments will get forgotten. Establish that score, get going on it, and then after a couple of years, or
realistically even just one year of on time payments and reporting history, we should be able to get you
into something.
That will establish that much needed credit history for vehicle loans, vehicle leases, commercial loans, all
that type of thing.

2. If you need any help with this or if your bank is telling you you can’t get a Visa even though you’re
offering to put your own money up as security I have a solution for you so please give me a call. It’s
Aleem PEermohamed from the Mortgage Specialist.com .