TL;DR
If your credit is weak, your best move is a timed plan. Reduce high-utilization balances, protect on-time payments, clean report errors early, and apply only when your file can support both approval and payment resilience.
How lenders use credit for mortgage decisions
Your credit score is a summary signal, not the entire decision. FCAC notes lenders set their own minimum score guidelines, and your score may differ by lender model.
In practice, lenders and insurers usually evaluate
- Payment history and any recent delinquencies.
- Current debt load and revolving utilization.
- Recent credit applications and inquiry pattern.
- Length and stability of credit history.
- Any collections, insolvency records, or major derogatory items.
What credit score do you need for a mortgage in Canada?
The most accurate answer is: it depends on lender policy and the rest of your file. Stronger credit usually improves pricing and product access, but score alone does not decide the file.
| Borrower profile | Typical lender view | What improves approval odds |
|---|---|---|
| Stable credit and clean repayment history | More prime options and stronger pricing leverage. | Keep utilization controlled and avoid new debt before closing. |
| Mixed credit but improving behavior | Possible approval with tighter conditions or fewer lender options. | Document income cleanly and reduce high-impact balances first. |
| Recent major credit issues | May require alternative-lender structure as a bridge strategy. | Use a written 12-24 month exit plan back toward prime lending. |
Use this framework to avoid the common mistake of chasing one score target while ignoring debt-service and documentation quality.
Hard checks, soft checks, and mortgage rate shopping
Credit inquiries can affect your score, but context matters. FCAC guidance notes that rate shopping for a mortgage within about a 2-week window is generally treated as a single inquiry by credit bureaus for scoring purposes.
That means you should compare lenders in a focused window, not spread applications over many months.
- Soft checks: generally informational and lower impact on score decisions.
- Hard checks: visible lending inquiries that can affect scoring.
- Best practice: run your lender comparisons in one organized sprint.
90-day mortgage credit prep plan
- Get your reports from both bureaus and verify all account details.
- Dispute errors immediately and track resolution deadlines.
- Prioritize revolving debt reduction, especially cards near limit.
- Keep every account current; payment history is the highest-impact factor.
- Pause non-essential credit applications until after mortgage funding.
FCAC also highlights a practical benchmark: try to keep credit usage below 30% of available credit when possible.
If your score is not mortgage-ready yet
Do not force timing if it creates long-term cost risk. In many cases, waiting and improving your file for a few months produces a better total outcome than rushing into high-cost financing.
When timing is non-negotiable, treat alternative lending as a bridge with a documented refinance plan, not as an indefinite solution.
- Set a refinance review date before your term midpoint.
- Track credit and debt milestones monthly.
- Model penalties and legal costs before choosing a short-term option.
Decision traps that hurt approval quality
Most expensive mistakes are behavioral, not mathematical
- Present bias: solving this month only, without a refinance roadmap.
- Loss aversion: delaying corrective action because admitting a weak file feels painful.
- Confirmation bias: shopping only for opinions that support a risky plan.
Counter-move: use one decision scorecard for every lender option: approval certainty, total cost, payment resilience, and exit flexibility.
Best next step
Before submitting applications, build a clean one-page credit readiness brief: current score context, debt list, utilization plan, and target application window.
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