Step-by-step client guide
Bruised credit pre-approval
A late payment, a collection, even a past consumer proposal does not end your mortgage chances. It changes which lenders will look at the file and what they'll charge.
Who this guide is for
Borrowers with recent missed payments, collections, a consumer proposal, or a credit score below 660.
Why this is harder than a standard file
Prime lenders want clean 24-month credit histories. B-lenders accept credit events with documented context and a repair plan.
Track exactly where you are on this file.
Tick off each step and document as you complete it. Progress saves on this device — no account, no sign-in. Pick up later from the resume banner.
Pull both Equifax and TransUnion reports. Don't apply for a mortgage until you've seen exactly what the lender will see.
Your plan
0 of 4 plan steps completeDocuments to assemble
0 of 3 documents gatheredMistakes we see clients make in this scenario
- ·Closing old credit cards after paying them off — average account age is a scoring factor.
- ·Applying to many lenders at once to compare — each pull dings the score.
- ·Carrying balances above 50% of limit thinking it 'shows usage.' Utilization above 30% reduces the score.
Red flags that will sink the file
- Any active collection at application time.
- Unfiled or unpaid taxes.
- A consumer proposal that has not yet been discharged.
What this realistically costs you
- B-lender route: expect a rate premium of 1–2.5% over prime rates, a lender fee of 1% of the mortgage, and broker fee where applicable.
- On a $500,000 mortgage, that's roughly $5,000 in fees up front and $400–$800 more per month.
How the underwriter actually reads this
Underwriters look for what caused the event, how it was resolved, and what has changed since. A documented one-off (medical, divorce, layoff) clears differently than a pattern.
What moves this file up
- Pay every account on time for 24 consecutive months
- Keep utilization under 30%
- Resolve any collections before applying
Questions clients ask us
Six years in most provinces (seven in some). The impact fades over time — a payment missed 4 years ago weighs much less than one missed last quarter.
Not at a prime lender. Most B-lenders want the proposal discharged and 12+ months of clean credit re-established after. Specialized lenders may consider an active proposal at much higher rates.
Get a real, underwritten pre-approval — not a system-generated number.
We'll route your file to a lender whose policy fits this scenario. No credit pull until you've seen the plan.
Start your pre-approvalOther scenarios
Written and reviewed by the Canadian Mortgage Compass Editorial Desk. This page is general information for Canadian readers and is not mortgage, legal, tax, or financial advice, and not an offer of credit. Rules, rates, and lender policies change; confirm your own situation with a licensed mortgage professional in your province. Editorial policy · Corrections