Buyer's Guide

Your Credit Score and Buying a Home

By Georges Matar · May 17, 2026 · 5 min read

A fictional example, for illustration. Picture a typical buyer: software engineer, good job, solid savings, excited about his first condo in Laval with less than 20% down. He finds the place. He makes an offer. It is accepted. Then, three days before the financing condition deadline, his mortgage broker calls.

Credit score: 585, below the 600 minimum CMHC requires for an insured loan.

The deal collapses. Twelve months later, after real work on his credit, he buys, but not that property, and at a higher price because the market had moved.

That kind of situation can often be avoided. Here is how.

What score do you actually need?

For a CMHC insured mortgage, meaning less than 20% down, at least one borrower, or a guarantor, needs a credit score of at least 600. Below that, the insurance is refused, so the loan is too.

Above that minimum, thresholds vary from one lender to another. There is no single scale: ask each lender which threshold it applies to your file.

The score is not the only criterion. The lender also looks at your debt ratios, the stability of your income and the nature of your employment. An excellent score does not offset debt ratios that are too high, and the reverse is true as well.

The five factors, by weight

1. Payment history. The most important factor. A single payment more than thirty days late can drop a good score by dozens of points, and the entry stays on file for about six years. Automate at least the minimum payment on every account: it is the highest return protection there is.

2. Utilization. The share of your limit that you use. Aim for under 30%, and under 10% if you are actively trying to raise your score.

A detail almost nobody knows: what counts is not your end of month balance, it is the balance at the moment the issuer reports your statement. You can pay your card in full every month and still show 80% utilization if your purchases land before the statement date. Pay part of it before that date and the effect shows up the following month.

3. Age of the file. Never close your oldest card, even unused. Its opening date supports the average age of your file, and closing an account also cuts your total limit, which pushes your utilization up. Two negative effects from one decision.

4. Credit mix. Having both revolving credit, like a card, and instalment credit, like a car loan, shows you can handle both.

5. New applications. Every hard inquiry leaves a mark. According to the Financial Consumer Agency of Canada (FCAC), they stay on file for three years at Equifax and six years at TransUnion. Avoid any new application in the twelve months before your mortgage request.

Worth noting: according to FCAC, when you shop for a mortgage or a car loan, quotes from different lenders obtained within a two week period are treated by the credit bureaus as a single inquiry.

The thin file trap, very common in Quebec

Many Quebecers use credit sparingly: one card, no debt, everything paid in cash. That is excellent personal management, and it is a problem for a lender.

With fewer than three active accounts, or a history under two years, the system does not have enough data to compute a reliable risk. The result is not a bad score, it is an inconclusive one, and some lenders decline on that basis alone.

The fix is simple but takes time: open a second product, use it for small regular purchases, pay it before the statement date. It takes about twelve months for the file to become usable. That is exactly why you handle credit a year before buying, not three weeks before.

What fixes fast, and what takes years

In 30 to 60 days: lowering utilization. It is the fastest lever available. Paying balances down before the statement date can move the score as early as the next cycle.

In 3 to 6 months: getting an error corrected. They are more common than people think: a closed account still showing as active, a debt already settled, sometimes someone else’s file under a similar name. You are entitled to your file free of charge from both Equifax and TransUnion. Request both, they do not always hold the same information, and dispute anything false in writing.

In 12 months and beyond: erasing the effect of a late payment, building a thin file, recovering after a collection. There is no shortcut here, only clean payments, month after month.

Be wary of services promising to “repair your credit” quickly for a fee. What is accurate on the file cannot be removed, and anything false you can have corrected yourself, for free.

The checklist before requesting pre approval

Pull both files, Equifax and TransUnion, and read them fully.
Dispute any error in writing, and keep the proof.
Bring every card under 30% of its limit, before the statement date.
Do not close any account, even unused ones.
No new credit application in the twelve months before you apply.
Automate all your minimum payments.
Aim for twelve months of flawless payments before applying.

Two mistakes that kill the deal after approval

Buying on credit between approval and signing. The lender often re-checks your file just before funding. A car loan or furniture financing taken on in between can void the approval, days before signing at the notary.

Changing jobs during the process. Even for better pay. Employment stability is part of the assessment, and a probation period restarts the clock.

The right time to deal with your credit is the day you start thinking about buying. Not the day you find the property. The affordability calculator gives you the other half of the picture: what your income actually supports.

Want to know whether your profile is mortgage ready? I am a real estate broker, not a lender or a mortgage broker. Get in touch and I will connect you with a mortgage broker I trust.