Buying your first home is one of the most exciting, yet most stressful processes in your life. Owning property is definitely part of the great Canadian dream, yet taking a large chunk of your pay cheque and putting it towards a mortgage payment can have you feeling anxious. Whether you are young or old, getting a mortgage can be difficult if you don’t have good credit. You may have impulsively racked up too much credit on your cards or you may have never had a credit card. Either way, a poor credit score does not equal good times at the lender when applying for a mortgage. But, all is not lost and you can build your credit up so that you are able to buy a house.

Four steps that will get you on your way to home ownership.

Apply for Credit to Increase your Score

Check your credit score

Using Equifax or TransUnion, find out exactly what’s up with your credit. Depending on what package you pay for, you’ll see your actual score and all of the transactions that are causing you issue and lowering your score. If you see something that you do not recognize, you can contact the credit bureau to fight to have it removed.

Apply for credit

The best way to build your credit score is to show lenders that you can be trusted with credit. This means that you have a credit card or other type of loan and are making payments monthly. Be careful with this though, as you don’t want to go over the gross debt service ratio required to get a mortgage. If your credit score is too low to get a regular loan or credit card, apply for a secured credit card, where you’ll put down a down payment on the card in order to borrow the money.

Pay off your debts

What could also be dragging your score down is the amount of debt that you have. If you have three credit cards that are all at their maximum limits, that doesn’t look good on a credit report. Pay down your debts (the higher-interest ones first) and watch your credit score rise.


If you are just starting out, either as an immigrant to Canada or as a young person and don’t have a credit score to show because of this, start investing your money to get your score up. First, open up a bank account with overdraft to show the bank you are responsible with your money. Soon after, you’ll receive offers for loans and credit cards. Accept these offers, but don’t depend on your credit to live. You want to use your credit responsibly and pay off each month’s payment in full.

Buying your first home is possible, even if you have poor credit. Build your credit and repair your score over time so you can take advantage of the best rates on the market.