Navigating the Mortgage Landscape
with Not So Good Credit

Understanding Not So Good Credit

The not so good, or below average credit, is a middle ground between good and bad credit. It’s a reflection of your financial history. We understand that not everyone has perfect credit, and we’re here to help you navigate the mortgage application process. A credit score in this category typically falls under 600. This may vary slightly depending on the credit bureau and scoring model used.

The Impact of Credit on Mortgage Applications

Having not so good credit doesn’t automatically disqualify you from getting a mortgage. However, it may affect the terms of your mortgage, including the interest rate and down payment requirement. Credit is considered as one of main factors when assessing your mortgage application. While a higher score can lead to more favourable terms, this particular level of credit doesn’t necessarily mean you’ll be denied a mortgage. It simply means you may face higher interest rates or stricter approval terms.

Factors Contributing to Not So Good Credit

Several factors contribute to it. These include your payment history, the amount of debt you carry, the length of your credit history, the types of credit you have, and recent applications for new credit. While these factors are similar to those that contribute to a good credit score, the difference lies in the details of your financial behaviour.

Payment History

Your payment history plays a significant role in your credit score. If you have a mix of on-time and late payments, it could lead to a below average credit score. Consistently making payments on time can help improve your score. On the other hand, late or missed payments can have a negative impact. It’s important to note that a single late payment won’t ruin your score, but a pattern of late payments can. Therefore, it’s crucial to make all your payments on time, even if it’s just the minimum payment.

Debt Amount

The amount of debt you owe can also impact your credit score. If you’re using a high percentage of your available credit, it could lead to a below average score. Reducing your debt can help improve your credit score. Lenders also look at your income to determine your ability to manage your monthly payments.

Credit History Length

The length of your credit history can also contribute to your credit score. If you have a short credit history, it might not provide enough information for lenders to assess your risk accurately. However, a longer credit history can provide a more acurate picture of your financial behaviour. It’s worth noting that even if you have a long credit history, if it’s marked by late payments or high levels of debt, it could still lead to a below average credit score.

Types of Credit

The types of credit you use can impact your credit score. If you only have one type of credit, such as a credit card, it could lead to an average score. Diversifying your credit can help improve your score. This means having a mix of credit types, such as credit cards, auto loans, and a mortgage. However, it’s important to manage all types of credit responsibly to avoid falling into debt.

New Credit Applications

Frequent applications for new credit can negatively impact your credit. Each application results in a hard inquiry on your credit report, which can lower your score. Limiting new credit applications can help maintain or improve your score. It’s also worth noting that the impact of a hard inquiry on your credit score decreases over time.

Improving A Below Average Credit Score

If you have a below average credit score and are looking to improve it, there are several strategies you can employ. These include making payments on time, reducing your debt, diversifying your credit, and limiting new credit applications. Remember, improving your credit score is a process that takes time and consistent effort. It’s also important to regularly check your credit report for errors, as these can negatively impact your score. If you find any errors, you should dispute them with the credit bureau.

How Ltd. Can Help

At our brokerage, we’re committed to helping you navigate the mortgage application process, regardless of your credit score. We can provide advice on improving your credit and help you understand how your credit impacts your mortgage options. We believe that everyone deserves a chance to own their dream home, and we’re here to help make that a reality. We can also help you understand the different types of mortgages available and which one might be the best fit for your financial situation.


Having below average credit doesn’t automatically mean you can’t get a mortgage. By understanding what contributes to it and how to improve it, we can guide you every step of the way. Remember, improving your credit is a journey, and with patience and discipline, and the right guidance and a solid plan, you can improve your credit score and secure that mortgage.