Credit problems are ordinary. Illness, job loss, separation, and business downturns leave marks on files belonging to otherwise responsible people. Lenders know this. What they want to understand is context and recovery.
What underwriters actually look at
- Recency — a missed payment last month weighs far more than one four years ago
- Severity — a thirty-day late is treated very differently from a write-off
- Type — housing and secured-loan payments carry more weight than a retail card
- Resolution — whether collections were paid, and whether a proposal or bankruptcy is discharged
- Rebuilding — what your payment behaviour has looked like since the event
- Utilisation — how close revolving balances sit to their limits
Score is a summary, not the file
Practical steps that tend to help
- Read both Canadian credit reports and dispute genuine errors in writing
- Bring every account current and keep it current — nothing matters more
- Reduce revolving balances well below their limits where possible
- Keep older accounts open; length of history has value
- Avoid new credit applications in the months before a mortgage application
- Obtain and keep discharge or completion paperwork for any insolvency
What is realistic, and what is not
Deliberate action over six to twelve months can change a credit profile meaningfully. It cannot erase accurate history, and no timeline or outcome can be promised. Anyone who guarantees a score increase or an approval is not telling you the truth.
Get an honest answer — even if the best next step is to wait.
This article is general information only. It is not a commitment to lend, an approval, or legal, tax, or financial advice. Mortgage availability, rates, terms, fees, and approval depend on the applicant, the property, lender requirements, and applicable law. Please review your own circumstances with a licensed mortgage professional.