11 Jul, 2023
Can You Get a Mortgage with a Bad Credit Score?

Obtaining a mortgage is a significant milestone on the path to homeownership, but what if you have a bad credit score? Can you still secure a mortgage in Canada? While a bad credit score can present challenges in the mortgage application process, it doesn’t necessarily mean that all hope is lost. There are many Canadian mortgage policies and programs that offer options for individuals with poor credit scores.

By understanding the intricacies of credit scores and exploring alternative avenues, it is indeed possible to navigate the mortgage landscape and find opportunities to fulfill your homeownership dreams and goals.

Credit Scores and Mortgage Approval in Canada

Credit scores play a vital role in the mortgage approval process. They provide lenders with an evaluation of an individual’s creditworthiness based on their credit history, outstanding debts, payment patterns, and other financial factors.

When it comes to mortgage applications, credit scores are a key consideration for lenders. A higher credit score indicates lower credit risk, which increases the chances of mortgage approval and favorable loan terms. In Canada, credit scores typically range from 300 to 900. While there is no official definition of a bad credit score, scores below 600 are generally considered poor or subprime.

Options for Obtaining a Bad Credit Score Mortgage in Canada

A bad credit score does not necessarily mean you’re ineligible for a mortgage. Here are some other options worth considering:

Private Mortgage Lenders

In Canada, numerous private lenders specialize in bad credit mortgages. Private lenders exhibit flexibility, with some having no minimum credit score requirements and even allowing interest-only payments. This flexibility helps borrowers facing cash-flow challenges.

Moreover, making regular mortgage payments to a private lender can contribute to improving credit scores, paving the way for future refinancing at lower rates with other lenders. 

B Lenders

Another alternative for bad credit mortgages lies with B Lenders, which include non-traditional banks like credit unions, monoline mortgage lenders, and mortgage investment corporations. Unlike private lenders, B lenders usually adhere to federal regulations, such as the Office of the Superintendent of Financial Institutions (OSFI) B-20 guidelines for residential mortgage underwriting.

B-20 sets minimum requirements for assessing borrowers, though not all B lenders enforce them. These B lenders have more lenient requirements, catering specifically to borrowers with blemished or bad credit.

Improve the Chances of Mortgage Approval with a Bad Credit in Canada

Borrowers with bad credit scores can take proactive steps to improve their chances for mortgage approval. These include:

  • Paying bills on time, reducing outstanding debts, and correcting any errors on credit reports.
  • Demonstrating financial stability and responsibility by maintaining a stable income.
  • Making a larger down payment to reduce the loan-to-value ratio.
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Seeking Professional Assistance for Bad Credit Score Mortgages

When it comes to obtaining a mortgage with bad credit in Canada, seeking professional assistance and exploring alternative options can significantly improve your chances of securing financing. 

Here are the key benefits of seeking professional assistance:

  1. Expert Guidance and Knowledge

Mortgage brokers or lenders specializing in Bad Credit Score Mortgages have extensive knowledge of the Canadian mortgage industry. They stay up to date with the latest policies and regulations, ensuring that you receive accurate and relevant advice throughout the process.

  1. Navigating Complexities

The mortgage application process can be complex, especially when dealing with bad credit. Professionals experienced in Bad Credit Score Mortgages are familiar with all of the details involved and can walk you through the entire process, helping you understand the requirements and potential obstacles.

  1. Access to a Wide Network of Lenders

Working with mortgage brokers has many benefits, one of which is their broad network. They have connections with lenders who are more lenient about the minimum credit score standards. This means they can connect you with lenders who are willing to consider your application despite your bad credit history.


While it can be challenging to obtain a mortgage with a bad credit score, it is not impossible. By understanding credit scores, exploring government-backed programs, improving creditworthiness, and seeking professional assistance, borrowers can increase their chances of securing a mortgage.

For personalized guidance and assistance in obtaining a mortgage in Canada, we encourage you to reach out to Orion Financial. Our team of mortgage brokers is well-versed in navigating the complexities of Bad Credit Score Mortgages and can help you explore tailored solutions.

Contact us to get expert guidance on securing a mortgage with a bad credit score in Toronto, the GTA cities, and across Ontario.

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