The importance of a good credit score is one of the most important considerations in life. Your credit score can determine whether you can get a loan, how much you will have to pay for that loan, and even whether you can rent an apartment. Your credit score is also a measure of your financial responsibility, so it’s important to understand what it is, how to keep it as high as possible and improve it if it’s currently low. In this blog post, we will discuss what a credit score is, how to get your credit score, what affects your credit score, and how to improve your credit score.
What Is A Credit Score
A credit score is a number that represents your creditworthiness. It is based on your credit history, which is a record of your borrowing and repayment activity.
Why Does Your Credit Score Matter
The higher your credit score is, the more likely you are to be approved for loans with favourable interest rates. Conversely, the lower your credit score, the less likely you are to be approved for loans or favourable rates and terms. Having a low credit score can make your life very difficult as you may not be able to get a mortgage, rent a property, obtain a credit card or purchase a vehicle.
What Is A Good Credit Score
As per Equifax’s website (as of October 2022), a good credit score is typically anything between 660 to 724 and 725 to 759 are considered very good, while anything above 760 is considered to be excellent. Having an excellent credit score can make your life a lot easier when it comes to getting loans along with lower interest rates. You can view Equifax’s explanation of what a good credit score is at the video below.
What Affects Your Credit Score
There are a few things that can affect your credit score. These include your payment history, the amount of debt you have, the length of your credit history, the types of credit you have, and new credit inquiries.
How To Rebuild Your Credit History
If you have a bad credit score, don’t despair. There are things you can do to rebuild your credit history. First, make sure you make all of your payments on time from now on. Second, pay off any debts you have as soon as possible. Third, don’t apply to open new accounts unless you absolutely need to. Fourth, try to get a mix of different types of credit. Finally, don’t apply for new credit too often.
How To Get Your Credit Score
The two most common ways to get your credit report is through Equifax or TransUnion ,these are the two most reputable credit reporting agencies here in Canada. You can request your credit report from Equifax and Trans Union via online, phone, by mail or in person. Additionally, if you have a credit car, you may be able to request a copy of the credit score from your credit card company as some banks and lending institutions have started offering this. Below is a short clip with additional information regarding credit scores and how to access yours.
Bad credit can be a real burden, preventing you from getting loans, renting apartments and buying a home. Keeping a good credit score will ensure that you can avoid such burdens and achieve your objectives whether it be real estate related or otherwise.
Hopefully the above has helped explain the importance of a good credit score.
Are you thinking of making a move? Contact me any time with any questions you may have about buying, selling, leasing or the market in general. I’m always happy to help.
The residential resale market rebounded in September after five months of declines in sales and the lull of the summer months. There were 9,046 sales reported in September, 18 percent fewer than reported last year, but more than 5 percent higher than the 8,580 reported sales in August, the first month-over-month increase since the early spring of this year.
As indicated in our August Report, there are a number of themes that are driving the market, themes that will continue at play for the remainder of this year and into 2022.
1. AVERAGE SALE PRICES
Average Sale Prices for all properties sold have been fairly stable through 2021. The average sale price has been approximately $1,080,000 since February, fairly consistent throughout those months, including the month of March, which saw the market deliver an unbelievable 15,629 sales.
In September, however, the average sale price jumped to a record-breaking $1,136,280: eye-popping because it includes 2,664 condominium apartment sales, which represent 30 percent of the entire market with an average sale price of only $708,000. Needless to say, the average sale price of ground-level property was on fire, with the average sale price for detached and semi-detached properties in the City of Toronto coming in at $1,779,000 and $1,305,000, respectively. The average sale price for the greater Toronto area will continue to rise, primarily by what is happening in the 905 Region.
2. CITY OF TORONTO – 905 REGION DISPARITY
In September average sale prices in the 905 Region once again accelerated much faster than in the City of Toronto, as is illustrated in the chart below.
As measured against all property types, the average sale price increased by more than 25 percent in the 905 Region as compared to only 12.2 percent in the City of Toronto (416).
The reason for this disparity is obvious. House prices of all types remain substantially less expensive in the 905 Region as compared to the City of Toronto, however they are catching up.
3. DEMAND-SUPPLY TENSIONS
September has clearly illustrated that demand, throughout the greater Toronto area, is dramatically high, and unfortunately, supply is chronically and historically low. It was no surprise that affordable housing was a key campaign platform for all parties during the recent national election.
At the end of September, there were only 9,191 available properties throughout the greater Toronto area, almost 50 percent fewer than last year. It is not surprising therefore that all properties that came to market in September (on average) sold in only 14 days, and substantially less in some sub-markets; for example, semi-detached properties in the City of Toronto (only 11 days). What is especially concerning is that the available supply in the 905 Region has dwindled dramatically.
In September of the 9,191 properties available for sale, 52 percent of them (4,821) are located in the City of Toronto. Of those 4,821 available properties, 2,918 are condominium apartments. Historically only 30-35 percent of available properties were located in the City of Toronto, the balance in the 905 Region. There is no clearer evidence that the pandemic has caused buyers to look beyond the City of Toronto, where house prices were less expensive and the supply was more plentiful. Not any more.
4. LIST PRICES VS. SALE PRICES
Except for one trading area in the City of Toronto, where the average sale price was $5,625,720, the recorded sale price of all properties sold throughout the greater Toronto area exceed the asking price, on average by 106 percent. This is a first, and it proves that in this market the list price is merely a starting point. No one expects that the end sale price will be equal to or lower than the asking price. This phenomenon is a product of the demand-supply problem. In some trading areas, the end sale price exceeded the asking price by substantially more than 106 percent. For example, all semi-detached properties in Toronto’s eastern trading areas sold for a breathtaking 118 percent over the asking price.
To reiterate, the list price of properties today is only a starting point.
5. CONDOMINIUM APARTMENT SALES
Condominium apartment sales, devastated by the early effects of the pandemic, have come roaring back, and so have their sale prices. In September 2,664 condominium apartments were reported sold across the region, exceeding pre- pandemic sales numbers. Of those 2,664 condominium apartment sales, 1,792 were in the City of Toronto.
As the chart above illustrates prices are following sales. In the City of Toronto, the average sale price increased to $744,730 and to $634,111 in the 905 Region, 8.5 and 18 percent, respectively. In the central core of Toronto, where 1,176 sales were recorded (44 percent of all recorded sales) the average sale price reached $806,242, a record high and the first time the average sale price has exceeded $800,000. Even Toronto’s least expensive housing type is now becoming pricey.
Going forward the five trends that have been discussed in this Report will continue to influence the resale market. Expect sales in October to be even stronger than September, with continued pressure on sale prices due to the lack of available supply.
Prepared by Chris Kapches, LLB, President and CEO, Broker, Chestnut Park® Real Estate Limited, Brokerage.
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