Ontario Mortgage with Bad Credit: What a 620 Score Means
Watch the original video: Good Income, Bad Credit. Can You Still Get a Mortgage?
“I have good income, but my credit score is 620. Am I screwed?” It is a fair question, especially when you have spoken with a bank and walked away thinking that one number has decided your entire future. The short answer is no: a 620 credit score does not automatically mean you cannot get a mortgage in Ontario. It does mean that your application may need a more thoughtful strategy than the application of someone with a 720 score.
Mortgage approval is not based on credit score alone. Lenders also look at your income, employment or business history, existing debts, down payment, property type, and the reason behind your credit history. The important distinction is that a lower score can change which lenders are realistic, how the file needs to be explained, and what terms may be available.
What a 620 Credit Score Can Change
Many major Canadian banks prefer to see a credit profile in the mid-600s or higher for a clean, straightforward application. In practice, a score between roughly 650 and 680 may make it easier to qualify under standard guidelines, while a 620 score can trigger additional questions, conditions, or a decline. Those thresholds are not universal rules, but they are useful planning benchmarks.
For example, a lender may ask for a larger down payment, stronger documentation, a co-borrower, or an explanation of past missed payments. The lender may also price the mortgage differently. That does not necessarily mean the application is impossible. It means the file needs to be placed with a lender whose risk guidelines fit the complete picture.
“A 620 credit score is a constraint to plan around—not a final verdict on whether you can become a homeowner.”
Why Good Income Still Matters
Strong, well-documented income can be one of the most valuable assets in a lower-credit application. Lenders want to understand whether the proposed mortgage payment is sustainable. Stable employment, consistent self-employment income, manageable debt, and a realistic purchase price can all help offset concerns about a credit score.
This is where the details matter. A salaried borrower may need recent pay statements, a job letter, and Notices of Assessment. A self-employed borrower may need multiple years of tax documents, corporate financial statements, and a clear explanation of how income is calculated. When the credit score is the weaker part of the application, the income and down-payment story should be especially organized.
The reason behind the credit issue matters
A 620 score caused by a short period of missed payments after a divorce, illness, job loss, or reporting error tells a different story from a pattern of ongoing high balances and recent late payments. Lenders cannot ignore the credit report, but they may evaluate a documented timeline more favourably than an unexplained score.
There Is More Than One Type of Mortgage Lender
One of the most common mistakes is assuming that your primary bank represents the entire mortgage market. It does not. A bank has its own policies, products, and approval box. If your application does not fit that box, the conversation may end even when another lender could reasonably consider the same borrower.
In Ontario, a mortgage broker can compare options across banks, credit unions, mortgage companies, and alternative lenders. Some lenders specialize in borrowers who have good income but a few credit hiccups. A broker’s job is not to promise an approval; it is to determine which lenders are actually in play and present the application accurately.
How to Approach the Application Strategically
1. Do not self-reject
Do not assume that a 620 score means you should stop looking. Instead, get a realistic assessment before making an offer or submitting multiple applications. Knowing your options early can prevent avoidable surprises.
2. Avoid unnecessary credit inquiries
Applying randomly with several lenders can create confusion and may add hard inquiries to your credit file. A coordinated review is usually more sensible than asking every bank you know for a separate answer. Discuss the best way to assess your file with a qualified professional before authorizing multiple applications.
3. Prepare a clear credit timeline
Be ready to explain what happened, when it happened, and what has changed. Include evidence of resolved debts, corrected reporting, payment arrangements, or improved financial habits. The objective is to give a lender a complete and credible story rather than leaving them to guess.
4. Consider the mortgage as a two-stage plan
In some cases, an alternative or “B” lender may be appropriate as a temporary solution while you rebuild credit. The rate may be higher than a prime bank mortgage, and there may be lender fees or a shorter term. The plan should include specific milestones: reducing revolving balances, making every payment on time, correcting errors, and reviewing your credit before renewal or refinance.
The Bottom Line for Ontario Borrowers
Your income and credit score are both important, but neither should be evaluated in isolation. A 620 score may narrow the field, yet there are lenders designed for different borrower profiles. The right answer depends on the property, down payment, income documentation, debt obligations, and the explanation behind the credit history.
If your credit is not where you want it to be, do not guess and do not let one bank’s answer define your options. I offer completely free consultations to review the numbers, discuss which lenders may be in play, and identify which parts of the application need work. There is no sales pitch and no pressure—just a practical conversation about the strongest path forward.
Ready to understand your options? Book a free consultation with Josh Perez. We will look at your situation together and build a mortgage strategy that fits your Ontario goals.
