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Bad Credit

Getting a mortgage with bad credit in Canada can be more challenging but is not impossible. There are lenders who specialize in subprime or bad credit mortgages, but they may have stricter requirements and higher interest rates. These lenders are useful as well for people who are self-employed, have had bankruptcies, collections, consumer proposals, and late payments on their credit bureau.

There are specific things you can to help improve a damaged credit score:

1. Keep your balances low in comparison to the limit:
The closer you are to the limit, the more it is perceived that you need the credit to live. Try keeping it below 60-65% of the limit.
2. Pay your bills on time:
This is obviously easier said than done, especially in difficult times. As long as you are keeping up with the minimums, your score should remain good.
3. Re-establish your credit:
If it is too late and your score is already damaged, the worst thing to do is nothing. There are credit card companies that are easier to apply for, and as long as you keep the balances low and pay it on time, your score will continue to improve.
4. Try not to have/use too many credit cards/credit lines:
Many people get into financial hardships because they have trouble managing their debt. They have so many different debts, that they lose track of it all. It can lead to late payments, and a lower credit score.
5. Special offers:
You will sometimes get offers from different credit card companies offering you 6 months at a lower rate. If you are responsible enough to use these to pay down your debts, it can be helpful. The downside is when the teaser rate goes up, and then it becomes more difficult to manage.
6. Do not borrow from predatory lenders
These lenders charge exorbitant rates that can cripple your finances, making it nearly impossible to pay them back. The amortizations are generally short on these loans, and almost none of your payment goes towards the principal portion of the loan.