Protecting Your Credit Score Through COVID-19
Victor Anasimiv • March 31, 2020
Personal finance is undoubtedly on the minds of most Canadians. For a lot of us, incomes have been reduced, but living expenses remain the same.
The full economic impact of the COVID-19 Pandemic is still uncertain. Unemployment is skyrocketing, people are social distancing, self-isolating, and businesses are struggling to stay afloat. At the writing of this article, over 1 million Canadians have already applied for EI.
However, the federal government has just announced several new programs designed to help those individuals, families, and businesses whose employment has been impacted by COVID-19. If you meet the qualifications for assistance, you should apply.
Now, if you're looking to make sure your credit score isn't hurt during these times, here is some basic advice. The key to managing your credit is to stay on top of your payments. If possible, always make at least the minimum payment on your credit cards and line of credits.
Keep making payments on your instalment loans, car payments and the payments on your mortgage.
If you find yourself getting behind, this isn’t the time to put your head in the sand, instead, make contact with your lenders. Everyone is going through tough times, lenders understand this and have programs in place to help. Chances are, they will be able to reduce your payments, defer your payments, or even consolidate your debts.
Missing payments without communicating with your lender is not an acceptable way to defer payments. This won’t be looked upon favourably and your credit will be damaged as a result.
So, at this very moment, if you’re behind on any of your payments, and you have the means to pay, right now would be a good time to go and make at least the minimum payment. Or to contact your lender and make payment arrangements, communication is everything.
Mortgage lenders have announced their contribution to easing financial stress is to offer mortgage payment deferrals for up to six months. And although this will be an excellent option for some to provide immediate financial relief, it might come with some unforeseen challenges down the line, credit misreporting being one of them.
The truth is, you won’t be penalized for restructuring or deferring your mortgage payments. Still, if your lender’s system isn't correctly adjusted, there’s a good chance something will misreport to the credit agencies and this could lower your credit score. This is true of credit cards, loans, car payments, and mortgage payments.
So, if you do find yourself having to make special arrangements with your lender or you want to defer your mortgage payments, here is a list of things you should consider doing:
- Request written confirmation (email is fine) of the new terms. Get everything in writing. Although it’s probably easiest to call into your bank, things get missed in conversations, having everything in writing is best for you!
- Make sure you record who you have been talking with, along with the date and time of any conversations. Keep minutes for yourself.
- Track your credit score on Equifax and Transunion after the new arrangements are in place.
- If you see any discrepancies, contact your lender immediately, and open a dispute with the credit reporting agencies.
Do your best to keep on top of your payments, make arrangements if you can’t. In time, this will pass. If you’d like to discuss mortgage options, please don’t hesitate to contact me anytime. We’re all in this together!
Your credit score is one of the most important numbers in your financial life — especially when it comes to getting a mortgage. But for most Canadians, how that number actually gets calculated remains a bit of a mystery.
Why Work With an Independent Mortgage Professional? If you’re in the market for a mortgage, here’s the most important thing to know: Working with an independent mortgage professional can save you money and provide better options than dealing directly with a single bank. If that’s all you read—great! But if you’d like to understand why that statement is true, keep reading. The Best Mortgage Isn’t Just About the Lowest Rate It’s easy to fall for slick marketing that promotes ultra-low mortgage rates. But the lowest rate doesn’t always mean the lowest cost . The best mortgage is the one that costs you the least amount of money over time —not just the one with the flashiest headline rate. Things like: Prepayment penalties Portability Flexibility to refinance Amortization structure Fixed vs. variable terms …can all affect the true cost of your mortgage. An independent mortgage professional looks beyond the rate. They’ll help you find a product that fits your unique financial situation , long-term goals, and lifestyle—so you’re not hit with expensive surprises down the road. Save Time (and Your Sanity) Applying for a mortgage can be complicated. Every lender has different rules, documents, and policies—and trying to navigate them all on your own can be time-consuming and frustrating. When you work with an independent mortgage professional: You fill out one application They shop that application across multiple lenders You get expert advice tailored to your needs This means less paperwork , less stress , and more confidence in your options. Get Unbiased Advice That Puts You First Bank specialists work for the bank. Their job is to sell you that bank’s mortgage products—whether or not it’s the best deal for you. Independent mortgage professionals work for you. They’re provincially licensed, and their job is to help you: Compare multiple lenders Understand the fine print Make informed, long-term financial decisions And the best part? Their services are typically free to you . Mortgage professionals are paid a standardized fee by the lender when a mortgage is placed—so you get expert guidance without any out-of-pocket cost. Access More Mortgage Options When you go to your bank, you’re limited to that bank’s mortgage products. When you go to an independent mortgage professional, you get access to: Major banks Credit unions Monoline lenders (who only offer mortgages) Alternative and private lenders (if needed) That’s far more choice , and a much better chance of finding a mortgage that truly fits your needs and goals. The Bottom Line If you want to: Save money over the life of your mortgage Save time by avoiding unnecessary back-and-forth Access more lenders and products Get honest, client-first advice …then working with an independent mortgage professional is one of the smartest decisions you can make. Let’s Make a Plan That Works for You If you're ready to talk about mortgage financing—or just want to explore your options—I'm here to help. Let's connect and put together a strategy that makes sense for your goals and your future. Reach out anytime. I’d be happy to help.
Buying a Home? Follow These 6 Key Steps for a Smooth Experience Buying a home is likely one of the biggest financial decisions you’ll ever make. It’s exciting—but it can also be overwhelming, especially when it comes to understanding how mortgage financing works. To help make the process smoother (and far less stressful), here are six essential steps every homebuyer should follow: 1. Start With a Mortgage Professional—Not MLS It’s tempting to start your home search by scrolling through listings and booking showings—but the real first step should be speaking with an independent mortgage professional . Unlike a bank that offers only one set of products, an independent mortgage expert has access to multiple lenders and options . That means better advice, better rates, and a better chance of finding a mortgage that truly fits your needs. 2. Build a Personalized Mortgage Plan Unless you’re buying your home with cash, you’ll need a solid financing strategy. That means: Reviewing your credit score Running affordability calculations Exploring different mortgage types, terms, and features Understanding down payments and closing costs The sooner you start planning, the more confident you’ll feel. Don’t wait until you’ve found the “perfect” property— get ahead of the process now . 3. Figure Out What You Can Actually Afford What a lender says you can borrow doesn’t always match what you can comfortably pay each month. Take a close look at your budget, lifestyle, and spending habits. Think about how your mortgage payments, property taxes, utilities, and other costs will fit into your everyday cash flow. Avoid the stress of being house-poor by knowing your real-life affordability , not just your paper pre-approval. 4. Get Pre-Approved the Right Way A true mortgage pre-approval isn’t just entering numbers into an online calculator. It means: Completing a mortgage application Submitting all your required documentation Having a mortgage professional fully assess your file When you’re officially pre-approved, you’ll shop for homes with confidence , knowing what you qualify for and that you’re financially ready. 5. Submit Your Documents Promptly and Stay Flexible Once you find a property and your offer is accepted, time is of the essence. That’s when all the upfront work you’ve done really pays off. Be ready to: Provide additional documentation if requested Respond to your mortgage professional quickly Stay flexible and proactive throughout the approval process Your lender needs to verify everything before finalizing the loan, so staying organized is key. 6. Don’t Make Big Financial Changes Before Closing Once you’ve secured financing and waived your conditions, freeze your finances until after you get the keys. Seriously—don’t: Change jobs Apply for new credit Take out a loan Make a large withdrawal Even small changes can throw off your approval. Keep everything status quo until you officially take possession. Recap: 6 Steps to a Smooth Home Purchase Connect with an independent mortgage professional Create a mortgage plan early Know what you can afford (not just what you qualify for) Get fully pre-approved Stay on top of documentation Avoid major financial changes before possession Ready to Buy with Confidence? If you’re thinking about buying a home—or just want to know what’s possible—let’s talk. I’ll help you map out a personalized plan that makes your homebuying journey feel simple, strategic, and stress-free. Reach out anytime. I’d love to help you get started.
