How To Make Your Credit Work For You.

HomeHappy • March 12, 2021

We work hard for our money, but what if we could make our money work hard for us?


One thing that’s often left out in money matters, is building your credit. Being smart with your money isn’t just about budgeting, or investing. Cause here’s the thing...


Your credit score is your leverage when it comes to big purchases.


Credit can have a bad rap, because people associate it with debt. While 71 percent of Canadian families carry some form of debt, we still see it as something to avoid. A necessary evil that lacks inherent benefits. 


But, there’s more to your credit than you may think. Your credit score affects your ability to get a job, buy or lease a new car, get a mortgage, and more. 


Healthy credit is your ticket to saving money and investing in your future. 


Get Started With The Basics


We’ve already taken a deep dive into credit, but here’s the Coles Notes version: 


  • Credit Scores range between 300 to 900.
  • Equifax and TransUnion generate your score based on data in your credit report. 
  • There are 5 essential factors when calculating your score: payment history, debt owed, credit account history, new credit, and types of credit. 
  • Credit Scores provide lenders a snapshot of your risk level as a borrower.


The bottomline? The higher your score, the better. Good credit plays a major role when it comes to a lender approving you for a new credit product. And it determines the rates and terms you’re offered.


Making smart financial choices both helps you out on the daily, and gives you VIP access to the best deals on the market. The less risky you are, the easier it is to qualify for the mortgage you want, with rates and terms you’re excited about. 


Lenders want to do business with people who are a good investment. 


Your digits do a lot of talking. 


Let’s Run The Numbers. 


760-900: Excellent credit. Way to go, go getter! You’re managing your finances like a champ, and lenders will notice.


725-759: Very good credit. Great job! You can expect a variety of credit products and choices.

660-724: Good. You’re doing well. While the lowest interest rates may not be in the cards yet, with patience, and consistent effort, your overall credit health will improve. 


560-659: Fair. You’ll need to demonstrate your financial responsibility. Your history of repayment is a great way to show that.


300-559: Poor. Either you’re just embarking on your credit building journey or you’ve had some setbacks. Don’t worry though, nothing is permanent, and you can improve. 


How to improve your score. 


First things first, know where you stand. 


You can’t know if you’re going from good to excellent or bad to good, if you don’t have the facts. Get the full picture, and order your credit report from Equifax or TransUnion.


While a credit score can be damaged in a variety of ways, all good scores are built on the same principles. By applying healthy financial habits, you’ll be amazed at how far you’ll come.


To get started, avoid these bad habits and financial choices:

 

  • Late or missed payments.
  • Too many open accounts. 
  • Closing an old account with a long history. 
  • High credit usage and loan balances.
  • Too many new credit applications.


Now that you know what not to do, it’s time to implement our tips to improve your score. For an in depth review, read our linked article. For now, here are some highlights.


Pay all your bills (including cellphone, rent, utilities) on time and in full each month. If you can’t pay your credit cards in full, at least pay the minimum, and try to keep your card usage below 30%. 


Don’t go over your limit. Keep your card utilization low, and spread your spending. If you use a lot of your available credit, you seem like more of a risk. It’s better to have 3 cards with some spending, than 1 card nearly maxed out.


Basically, use your credit card wisely. 


It’s borrowed money, not free money. Before you’ve spent a dime, you’ve already agreed to pay it all back. Show that you can responsibly manage your finances, and your credit score (and wallet!) will thank you. 


Everything worth having takes time. Our credit score is always changing, and if you’re willing to change your habits, your score will reflect your efforts given time and consistency.


There are no shortcuts when it comes to building good credit, and if a third-party company claims they can quickly boost your scores, buyer beware. The Office of Consumer Affairs states that only lenders can alter and submit information on your credit file. 


To Wrap It Up


With great credit, lenders will give you better deals, just so they can have your business. 


If you take small, simple steps to build your credit, you will see great results. Plus, managing your money gives you the freedom of knowing what you have and where it’s going. 


If you want to investigate this topic more, the Financial Consumer Agency of Canada outlines these six steps to help you move forward:


  • Make a budget.
  • Check your credit health.
  • Map out a plan.
  • Take control and take action.
  • Stretch your dollar.
  • Plan ahead.


If you invest in yourself, and build good credit, you’ll be able to make bigger purchases with better terms and rates. Which means you’ll pay less over time. 


If you work on building your credit, it will work for you too. 


And if you aren’t where you want to be yet, don’t sweat. 


Your goals are achievable, and you can do this. We’re happy to be there as advisors, confidants, and cheerleaders. No matter where you’re at right now, we’re always here to advise and help. 


Share:

Recent Posts

Home Reno Dreams? Let’s Talk Mortgage Financing

By HomeHappy • January 7, 2026
How to Use Your Mortgage to Finance Home Renovations Home renovations can be exciting—but they can also be expensive. Whether you're upgrading your kitchen, finishing the basement, or tackling a much-needed repair, the cost of materials and labour adds up quickly. If you don’t have all the cash on hand, don’t worry. There are smart ways to use mortgage financing to fund your renovation plans without derailing your financial stability. Here are three mortgage-related strategies that can help: 1. Refinancing Your Mortgage If you're already a homeowner, one of the most straightforward ways to access funds for renovations is through a mortgage refinance. This involves breaking your current mortgage and replacing it with a new one that includes the amount you need for your renovations. Key benefits: You can access up to 80% of your home’s appraised value , assuming you qualify. It may be possible to lower your interest rate or reduce your monthly payments. Timing tip: If your mortgage is up for renewal soon, refinancing at that time can help you avoid prepayment penalties. Even mid-term refinancing could make financial sense, depending on your existing rate and your renovation goals. 2. Home Equity Line of Credit (HELOC) If you have significant equity in your home, a Home Equity Line of Credit (HELOC) can offer flexible funding for renovations. A HELOC is a revolving credit line secured against your home, typically at a lower interest rate than unsecured borrowing. Why consider a HELOC? You only pay interest on the amount you use. You can access funds as needed, which is ideal for staged or ongoing renovations. You maintain the terms of your existing mortgage if you don’t want to refinance. Unlike a traditional loan, a HELOC allows you to borrow, repay, and borrow again—similar to how a credit card works, but with much lower rates. 3. Purchase Plus Improvements Mortgage If you're in the market for a new home and find a property that needs some work, a "Purchase Plus Improvements" mortgage could be a great option. This allows you to include renovation costs in your initial mortgage. How it works: The renovation funds are advanced based on a quote and are held in trust until the work is complete. The renovations must add value to the property and meet lender requirements. This type of mortgage lets you start with a home that might be more affordable upfront and customize it to your taste—all while building equity from day one. Final Thoughts Your home is likely your biggest investment, and upgrading it wisely can enhance both your comfort and its value. Mortgage financing can be a powerful tool to fund renovations without tapping into high-interest debt. The right solution depends on your unique financial situation, goals, and timing. Let’s chat about your options, run the numbers, and create a plan that works for you. ๐Ÿ“ž Ready to renovate? Connect anytime to get started!

Fixed vs. Variable Mortgage Rates in Canada

By HomeHappy • December 31, 2025
Fixed vs. Variable Rate Mortgages: Which One Fits Your Life? Whether you’re buying your first home, refinancing your current mortgage, or approaching renewal, one big decision stands in your way: fixed or variable rate? It’s a question many homeowners wrestle with—and the right answer depends on your goals, lifestyle, and risk tolerance. Let’s break down the key differences so you can move forward with confidence. Fixed Rate: Stability & Predictability A fixed-rate mortgage offers one major advantage: peace of mind . Your interest rate stays the same for the entire term—usually five years—regardless of what happens in the broader economy. Pros: Your monthly payment never changes during the term. Ideal if you value budgeting certainty. Shields you from rate increases. Cons: Fixed rates are usually higher than variable rates at the outset. Penalties for breaking your mortgage early can be steep , thanks to something called the Interest Rate Differential (IRD) —a complex and often costly formula used by lenders. In fact, IRD penalties have been known to reach up to 4.5% of your mortgage balance in some cases. That’s a lot to pay if you need to move, refinance, or restructure your mortgage before the end of your term. Variable Rate: Flexibility & Potential Savings With a variable-rate mortgage , your interest rate moves with the market—specifically, it adjusts based on changes to the lender’s prime rate. For example, if your mortgage is set at Prime minus 0.50% and prime is 6.00% , your rate would be 5.50% . If prime increases or decreases, your mortgage rate will change too. Pros: Typically starts out lower than a fixed rate. Penalties are simpler and smaller —usually just three months’ interest (often 2–2.5 mortgage payments). Historically, many Canadians have paid less overall interest with a variable mortgage. Cons: Your payment could increase if rates rise. Not ideal if rate fluctuations keep you up at night. The Penalty Factor: Why It Matters More Than You Think One of the biggest surprises for homeowners is the cost of breaking a mortgage early —something nearly 6 out of 10 Canadians do before their term ends. Fixed Rate = Unpredictable, potentially high penalty (IRD) Variable Rate = Predictable, usually lower penalty (3 months’ interest) Even if you don’t plan to break your mortgage, life happens—career changes, family needs, or new opportunities could shift your path. So, Which One is Best? There’s no one-size-fits-all answer. A fixed rate might be perfect for someone who wants stable budgeting and plans to stay put for years. A variable rate might work better for someone who’s financially flexible and open to market changes—or who may need to exit their mortgage early. Ultimately, the best mortgage is the one that fits your goals and your reality —not just what the bank recommends. Let's Find the Right Fit Choosing between fixed and variable isn’t just about numbers—it’s about understanding your needs, your future plans, and how much financial flexibility you want. Let’s sit down and walk through your options together. I’ll help you make an informed, confident choice—no guesswork required.

Divorce and Your Mortgage: What You Need to Know

By HomeHappy • December 24, 2025
Going Through a Separation? Here’s What You Need to Know About Your Mortgage Separation or divorce can be one of life’s most stressful transitions—and when real estate is involved, the financial side of things can get complicated fast. If you and your partner own a home together, figuring out what happens next with your mortgage is a critical step in moving forward. Here’s what you need to know: You’re Still Responsible for Mortgage Payments Even if your relationship changes, your obligation to your mortgage lender doesn’t. If your name is on the mortgage, you’re fully responsible for making sure payments continue. Missed payments can lead to penalties, damage your credit, or even put your home at risk of foreclosure. If you relied on your partner to handle payments during the relationship, now is the time to take a proactive role. Contact your lender directly to confirm everything is on track. Breaking or Changing Your Mortgage Comes With Costs Dividing your finances might mean refinancing, removing someone from the title, or selling the home. All of these options come with potential legal fees, appraisal costs, and mortgage penalties—especially if you’re mid-term with a fixed-rate mortgage. Before making any decisions, speak with your lender to get a clear picture of the potential costs. This info can be helpful when finalizing your separation agreement. Legal Status Affects Financing If you're applying for a new mortgage after a separation, lenders will want to see official documentation—like a signed separation agreement or divorce decree. These documents help the lender assess any ongoing financial obligations like child or spousal support, which may impact your ability to qualify. No paperwork yet? Expect delays and added scrutiny in the mortgage process until everything is finalized. Qualifying on One Income Can Be Tougher Many couples qualify for mortgages based on combined income. After a separation, your borrowing power may decrease if you're now applying solo. This can affect your ability to buy a new home or stay in the one you currently own. A mortgage professional can help you reassess your financial picture and identify options that make sense for your situation—whether that means buying on your own, co-signing with a family member, or exploring government programs. Buying Out Your Partner? You May Have Extra Flexibility In cases where one person wants to stay in the home, lenders may offer special flexibility. Unlike traditional refinancing, which typically caps borrowing at 80% of the home’s value, a “spousal buyout” may allow you to access up to 95%—making it easier to compensate your former partner and retain the home. This option is especially useful for families looking to minimize disruption for children or maintain community ties. You Don’t Have to Figure It Out Alone Separation is never simple—but with the right support, you can move forward with clarity and confidence. Whether you’re keeping the home, selling, or starting fresh, working with a mortgage professional can help you understand your options and create a strategy that aligns with your new goals. Let’s talk through your situation and explore the best path forward. I’m here to help.