There seems to be a lot of confusion about what exactly a rent to own is, so let’s clarify!

A rent to own is where a landlord and a tenant agree that at a certain time the tenant will purchase the home from the landlord. So is it a good idea?

We have all heard of horrible tenants absolutely destroying a property. A rent to own agreement can help guarantee that the tenant is serious about taking care of the home. The landlord then doesn’t have to worry as much about their property and also can benefit financially. The landlord will never lose out on a rent to own agreement because their home will either be purchased for a fair price or the tenant will decide to not finalize the agreement, in which case the landlord will get to keep part of the entire deposit.

A tenant may consider a rent to own agreement if there is a life threatening issue, death, credit issue, or a failure to save a down payment in the family. In any case, it’s always important to read the fine print of a rent to own agreement to ensure the satisfaction of both parties.

The first step in a rent to own agreement is to consult a lawyer and financial professional. You need to get pre-qualified when considering a rent to own especially if you don’t have stable credit. These professionals will need to see two trade lines, such as a loan or credit card, with consistent payments for the past two years. You will also want to ensure that you are able to afford the property according to your affordability ratios.

A landlord also benefits from visiting a financial professional if you have written permission, as they will be able to tell you if the tenant is in an appropriate financial position. The key things a landlord should require are:

1. Deposit – In the agreement, a deposit date and amount should be specified. The landlord should also keep a record of the bank deposit on file.
2. Additional amount towards the down payment – The large monthly rent will remain, but anything additional can count towards the down payment. These details should also be outlined in the agreement.
3. Property Value – Property values are volatile and hard to predict. If you agree on a price of $300,000 and at the time of purchase the home is worth $250,000 you will be unable to obtain a mortgage for the original amount agreed on.   Even if both parties agree to the purchase price a lender will not allow it.  To protect both landlord and tenant, the agreement should include a statement that the property value will be determined when the purchase date arrives and how it will be appraised.

If you are considering a rent to own agreement, come chat with one of our professionals at Dominion Lending Centres. We can help you sort through the confusion, saving you time and money.

Courtesy of Alim Charania, AMP – DLC Regional Mortgage Group

Many people find themselves renting a home and helping others get ahead financially. When the question of “why rent” is posed, the most common answer is the issue of not having a down payment. What is interesting is that the person could afford the monthly payments but simply does not have the down payment. Home ownership in North America is less than 70%. The US Census Bureau reports that the US homeownership rate fell to 63.4% in the second quarter. This is the lowest level since 1967. In comparison, home sales are doing very well in the USA. Home construction companies are doing a booming business. Cabinet maker American Woodmark (AMWD) stock price started the year at about $29 and has hit a high of $67 a share. US private equity firm The Blackstone Group (BX) is now the single largest homeowner in America. They rent homes to those who cannot buy. Put yourself in the position to buy.

How does one go about obtaining the down payment? First let’s look at the options once you get that down payment. You could buy a condo or a townhome and have a reasonable payment. A home might seem to be out of your price range but if you purchase a $600,000 home with a rental suite with 5% down your mortgage payments would be about $2,700 a month. Take this amount then consider the $1,100 you get for renting your basement suite and your portion of the mortgage is $1,600 a month. This makes it much more affordable. Then there is also the option of renting out rooms and sharing living space for a season for additional income.

The biggest reason one does not have the down payment is lack of planning and perhaps the lack of hope for ownership of a home. Let’s take the case of a teenager. They have a vision of owning a home by the time they are 23 years old, after they have completed their degree. Let’s call them Homeowner. Another teenager has a vision of driving a nice car. We will call them Car-owner. Homeowner works hard while getting their education. There is not a lot of time between work and school. They stay at home rent free while going to school but have to pay for their schooling. They invest what is left and over the next six years watch their investments grow.

Car-owner buys a nice car; interest on the car loan is only 1.9% so almost free money. Car payments are $500 a month, insurance is $200 a month and car owner decides he wants to live independently as a renter as it is only $500 a month. While going to school Car-owner decides to get student loan so he does not have to work as much. Car-owner finds he is spending $2,000 a month on living expenses.

At age 23 they both are out of school. Homeowner looks at their savings and sees it has grown to $120,000. With this as a down payment, they can purchase a home and rent out a portion to begin their journey as a Homeowner.

Car owner gets a good job after graduating from university. Student debt is at $50,000 and the car is getting old so it is sold and upgraded to another car with another loan. Then there is the question, “How am I supposed to get a down payment?”

This is very possible and the reason why it is imperative to start taking financial small steps one day at a time. Compound savings and consistent budgeting will prove to be very fruitful in just a few short years. I have personally seen young people taking the steps to save and invest while going to university and compiling a portfolio of investments that would give them a substantial down payment. This does require sacrifice. It is a wise soul who weighs the cost in their youth and moves toward establishing a healthy financial future. I look forward to seeing more of these young people moving towards purchasing their homes and establishing themselves early in their careers.

Courtesy of Kevin Bay, AMP – DLC Producers West Financial 

Becoming a landlord can seem very appealing.  There is a large influx of people to BC, Alberta and Ontario and they all need a place to live.  But before you dive headfirst into this potentially lucrative pool, there are some things to consider. Aren’t there always?

Down Payment

You will need at least 20% of your own resources to put down.  That can be a lot of money.  On a $300,000 property you will need $60,000.  On top of this, you have the other costs to complete the purchase such as legal fees, title insurance and potential mortgage insurer fees.  Some lenders will still utilize the mortgage insurers to lessen their overall risk on a rental property and that cost is passed onto the purchaser.

Ongoing Costs

Being a Landlord is not a passive investment and like any fledgling business, it will have to be nurtured to pay out.  You haven’t just purchased a property; in reality you have purchased a business.

The first cost to consider is your time.  You will be the one responsible for the repairs and maintenance on the property.  These calls can and will come at the worst of times.  Make sure you and your family discuss this beforehand.  It’s all well and good to imagine a family dinner will be interrupted but now imagine that call coming in on Christmas day.  You will also spend time interviewing tenants, chasing rent, going to the bank and a myriad of other details.  A property management company can be a great way to mitigate this but this could eat into your cash flow up to 10%.

And then there is the cost in dollars. You will want to budget 2% of the purchase price per year for ongoing monetary expenses. On the same $300,000 purchase that’s $6000/year.  There will be ongoing costs such as your mortgage, property taxes and insurance but as we all know, owning a home is expensive.  There is always the risk that you will have a major expense such as the furnace or a new appliance.  And what if your tenant doesn’t pay or the property sits vacant?  Having a sufficient buffer protects you from paying these personally.

Budget

Sometimes people come in thinking that as long as the mortgage is covered, they will be fine to pay the taxes and other expenses out of their own pocket.  I would caution a big no!  Your rental is a business and no business can, nor should it, operate in the red.  Sit down and calculate exactly how much you will need to charge each month to be viable.  Will the rental market in your area support the rental amount you need to charge?  Have you allowed for all expenses and a buffer?

Banks have Excel spreadsheets they use and exact ratios worked out.  Ask your mortgage professional to help.  We are happy to!

Learn your Rights as a Landlord

The Residential Tenancy Act differs from province to province.  Know yours before you buy.  There will be things expected of you as a landlord that you may not be aware of but that you are now legally obligated to fulfill.  It’s equally important to know your rights.  Think worst case and plan accordingly.  How do you evict? What is the process for increasing the rent?  You need to know.

Know the Tax Implications    

Rental income is income like any other and will need to be reported to the CRA. Having a qualified tax professional on your side can help you avoid short and long term consequences.  For example, if you have a legal suite in your primary residence, you will want to be aware that there could be a capital gains tax implication when you sell.   Use your tax professional and let them know your plans with your rental property so that they are able to help you strategize.

Be Realistic

Not every tenant will be perfect.  We have all heard the stories.  Your investment may take up to 10 years to be financially viable and in the meantime your blood, sweat and tears are likely to be needed.  Are you ready??

Courtesy of Pam Pikkert, CMP – DLC Regional Group 

Building your dream home can sound really exciting, but have you thought about everything that goes into building a new home?

Here are 7 Questions you should ask yourself before making any concrete plans.

1. What are my expectations with this new home?

Are you looking for a custom home build where you are responsible for every single decision made or do you want to choose an existing floor plan and build a house that is almost entirely predetermined for you? Or maybe you are looking for a mix of both? Regardless…

EVERY HOME BUILDER HAS A UNIQUE APPROACH TO BUILDING. MAKE SURE YOUR LEVEL OF INVOLVEMENT IS CRYSTAL CLEAR FROM THE START!

2. How familiar am I with the local builders and the homes they build?

Although there are standards for how your home will be built (code), there are no standards for pricing. Each builder will quote prices using different specifications for the different homes they build. If one builder is coming in with an estimated build price that is considerably less than another builder, you should dig deeper into the quality of materials being used.

Is the flooring hardwood and tile or carpet and lino? Am I getting the basic white appliance package or stainless steel (or are appliances even included?).

Knowing your local builders and the homes they build will let you compare apples to apples and ensure you get the best home!

3. Do I have any specific needs or features I want included?

If you are looking to add a feature to your home to meet a specific need, make sure your builder has previous experience building in this area. Practical features like wheel chair accessibility or a separate basement suite should be considered as well as lifestyle features like a backyard pool or a below the kitchen wine cellar.

Always consider experience when choosing a builder and don’t be afraid to ask for references!

4. Is possession date important to me?

Building a home is a long process – there are so many moving parts that delays are almost inevitable. If you have a specific timeline with a very narrow window for possession, building might not be your best option.

IF YOU DON’T HAVE FLEXIBILITY AROUND WHEN YOU TAKE POSSESSION OF YOUR NEW HOME, BUILDING MIGHT NOT BE YOUR BEST OPTION.

5. Can I afford this home if interest rates go up before I take possession?

Given that the building of a home has no guaranteed end date, it is important to take a comprehensive look at your personal finances and discuss your financing options with a mortgage professional. That is where I come in!

Because most lenders will only hold an interest rate for 120 days, it’s a good idea to make sure that you have allowed some room in your debt service ratios for a potential rate increase before possession date.

6. How well do I handle stressful situations?

Building a home can be a very stressful experience, there is no doubt about it. How well you handle stress should determine what type of house you build. Go back to point one and determine your expectations with an honest evaluation of not only what you want, but what you are capable of handling!

7. Is it better for me to build a home or buy an existing home?

Sometimes people fall in love with the idea of building a home more than they actually enjoy building the home! There is a chance your dream home is out there, already built, priced comparably, ready to buy without going through 2 years of waiting, decision making and delays!

MAKE SURE YOU ARE LOOKING AT ALL YOUR OPTIONS AND NOT JUST FIXATING ON BUILDING FOR THE SAKE OF BUILDING!

If you are considering building a home, please let me know… I would love to discuss some of the financing options available to you through Dominion Lending Centres!

Courtesy of Michael Hallett – Accredited Mortgage Professional – DLC Producers West Financial

Around the end of May 2014, the market started to experience a declining trend in mortgage rates. Though the housing market was already superb, professionals in the industry began gearing up for an influx in home buying. Their predictions were correct and we’ve seen more and more houses of higher value being sold since that time.

When an area with a hot market such as Vancouver, Calgary and Toronto experiences a mortgage rate decline, many renters make the hasty decision to purchase a dwelling before the rates jump up again. Though you could get a great deal, you need to ask yourself if you’re truly ready for everything that home ownership entails.

Here are 6 key ways to decide if it’s the right time for you to buy.

1. You’re Ready to Commit

When looking to buy a home you need to consider your future. Do you see yourself living in the home for at least three to five years? This is the minimum ownership time you need to consider as it takes three to five years to regain your buying and selling costs. If you were to sell before you’ve recovered those costs then you may lose money and could be liable to pay capital gains taxes. Unless you’re sure that you can commit to a place for a few years then it’s better to continue renting until you’re more settled.

2. Budgeting is Second-Nature

Mortgage payments are bound to be your biggest monthly expense, but they aren’t the only payment you’ll be liable for when purchasing a home. You also need to factor in the insurance, property tax, and condominium fees if you live in a shared building. All of these expenses add up and you need to have solid budgeting skills to keep your finances in order so you know what you can afford. Always go into home buying with a budget so you don’t end up looking at homes out of your price-range.

3. Your Finances are in Order

Home ownership comes with an extremely high price tag and you need to be 100% sure you can afford it. Before buying a home, make sure you have a reliable job and income. Your expenses will come due every month no matter what changes your situation may experience. If you can’t pay them, you could end up losing your investment and going into debt. Besides the income security, you also need to make sure you have little to no debt and good credit. These two aspects are the things a mortgage professional will look at first to make sure you’re financially stable and won’t have problems making payments.

4. You Have Savings

Homes don’t just have mortgages, they have down payments and hidden costs. You need to have a sizeable savings account to ensure you’re prepared for the initial and unexpected costs your investment will most certainly bring. Having a large down payment helps get you a lower interest rate, therefore, saving you money in the end. A large down payment typically means 20% of the home’s value. You also need to have an emergency savings fund for those unexpected costs, such as repairs, or in case you don’t have an income for a period of time if you get laid off.

5. Everything has been Researched

Do you know what the past and current mortgage rate trends are? Have you looked into what they’re predicted to do in the future? Do you know what kind of home you want and what they’re currently selling for? These are all things you need to know before buying your first home, plus much more. Make sure to do your research to ensure your investment is a sound one.

6. You’re Prepared to be a Landlord

Are you ready to take on the responsibility of a landlord? No longer will you be able to call up your manager to come unclog the toilet or fix appliances that have broken. All those tasks will fall on you and could be rather time consuming. You also need to be prepared if you plan on renting out the home to tenants in the future. This will involve collecting money and being on-call if the renters need anything.

If you’ve said yes to everything on this list then you could begin seeing mortgage and real estate professionals to begin the home buying process! If however, you weren’t confident in one or more areas on this list then you need to take some time to resolve any barrier that may be in your way. You could also make appointments with real estate agents and Dominion Lending Centres mortgage professionals to discuss what your options are and what you can do to prepare for home ownership. It’s always best to take a little extra time to make sure that your investment is something you actually want, at the right time, and for a price you can afford. Happy house hunting!

Courtesy of Pam Pikkert – Mortgage Professional – DLC Regional Mortgage Group 

I have many friends that shop online and go to dozens of different sites in order to save a few bucks on books, TVs, appliances, etc. Is this a good idea? It definitely is if the savings are worth it and you don’t mind taking the time out of your busy day to do all the research.

What about buying a home and getting a mortgage? This is one clear-cut example of why you absolutely need to spend time and do your homework when getting a mortgage. Yes, getting an excellent rate is one part of it, but there are costs that can surface down the road without you even thinking of it now, which can cost you a lot more than you think (I’m talking about mortgage penalties).

Lucky for the consumer, your Dominion Lending Centres Mortgage Broker does this work for you. Your Mortgage Broker has access to dozens of financial institutions, corresponding to hundreds of mortgage products… this means that you really do have a one-stop-shop for shopping around. Your Mortgage Broker is an expert at mortgages and will give you the best deal around for your specific situation.

On the other hand, many clients do choose to consult their bank first; that’s ok! However, if you do go to your bank, it’s best to be armed with the right questions:

• Ask the bank representative how many mortgage clients they’ve had and how long they’ve been in the banking industry.
• Ask if he/she plans on being in that same position for a while or if they’re working on a promotion (or even leaving the industry). This is important so that you know if the person will still be there once you find your place and if they’ll be around in the future if you have any questions. I used to work at a bank and that was the number one complaint from clients (that bank representatives are always moving around). It’s not their fault. They just want to get promoted and keep moving up the ranks.
• Ask how their bank registers the mortgage (collateral vs standard charge) and what the differences are between the charges.
• Most of us want to pay down our mortgages faster, so ask about pre-payment privileges and how it works.
• Ask about the different types of mortgage terms and rates.
• Most importantly, ask how prepayment penalties are calculated and ask for an example. This is important as down the road you may have to get out of your mortgage before the maturity date.

After you visit your bank, go and contact your local Dominion Lending Centres Mortgage Broker and ask them the same questions.

In just  two or so hours – an hour at your bank and an hour with your Dominion Lending Centres Mortgage Broker – you would have covered 230+ lending institutions. To be clear, you would have covered one lending institution with your bank and 230+ with Dominion Lending Centres!

In my opinion, spending the two hours can potentially save you many headaches and thousands of dollars down the road.

Courtesy of Joe Cutura – Mortgage Professional – DLC Canadian Origin

Looking to purchase a Condo in a Strata?

During my time as a Mortgage Broker,  I have helped Buyers side step a few pitfalls.

Most of these are really easy to avoid and come down to simply doing your own due diligence prior to and during the shopping process.

#1 – Work With Your Own Realtor!

The first and most common issue that I have seen is only working with the Listing Realtor or the Realtor in the Sales office.  There should be no surprise here that the selling Realtor/Agent is working on the Seller’s behalf and even if they agree to work with you too, their end goal is to sell the unit.

There is nothing wrong in looking around and initiating conversation with a Realtor in the Sales office, as they should be quite knowledgeable about the current build status and features within the units.  It is still advisable to enlist the help of your own Realtor from day 1; A Buyer’s Agent!  It will cost you nothing yet you gain the benefit of a Realtor working in your corner and covering your best interests.

When clients work only with the Sales Agent, there are far fewer Subjects or safety clauses in the contract that cover the buyer and allow them a few ways out of the contract.  Far more important details will be pointed out by your own realtor than getting the fireplace put in or a free microwave.  Perhaps you have a large SUV and the parking stall appointed at the vendor’s discretion has a large ventilation unit or obstruction leaving it useless to you.  Use your own Realtor!

#2 – Ensure Strata Documents are Readily Available

On several occasions this year clients have put in a rush offer with a short, four business day Subject Removal yet the Listing Realtor had not pre ordered the Strata Documents, Engineers Reports and/or Depreciation Reports.  These documents, along with meeting minutes and insurance papers, should be on hand and ready for review immediately on acceptance of your offer.

An expedited sale contract requires a quick mortgage broker and lender review that is difficult without these papers and reports.  A rush order for Strata docs can jump from a standard fee to over $150.00 if required this quickly.  Before putting in an offer to purchase, your Realtor should ensure that the Property Documents are readily available for you immediately on acceptance of your offer.

#3 – Purchasers Need Time To Review Strata Documents

Most importantly, YOU are the intended purchaser of this property.  You should have ample time to review these documents while you are also working on booking your home inspection, re-negotiating your offer to purchase and ensuring that you have your financing in place.   There is much to do in a short time.

This rush scenario with little time to review docs has seen people go into a binding contract only to realize that they have major repairs scheduled or that the Strata is ill funded.

#4 – Self Managed or Poorly Managed Strata

Better to find out early on and possibly before spending hundreds on a home inspection that the Strata Corp has failed to order a Depreciation Report, or that the contingency funds are not there to support the ongoing maintenance that your home will need.  Lack of proper funds saved now equal special assessments and possibly large financial burdens in your future.

Lenders are looking more carefully at Self-Managed Strata’s and are scrutinizing Depreciation Reports if they are available.  They want to make sure whether the Strata is self-managed or not, that the property is sound and that it is run with a good financial picture.  You should too.

With a good Realtor and Dominion Lending Centres in your corner, you should have all of your documents ready up front and ensure that all personal and property information is readily available prior to setting a subject removal date.   A quick file can be a breeze and you will be far less stressed when all is in hand ready to go!

Courtesy of Kris Grasty – Mortgage Broker – DLC Canadian Mortgage Experts 

Common Myths About Credit Scores

Because the top secret formula has never been released there are common myths that are floating around about the ones credit score, here are the top 5.

1. Too Many Credit Cards Will Hurt My Credit Score – Actually, cancelling healthy active cards or accounts hurt more as all of the payment history is lost along with the type of credit granted. The average Canadian has 10 credit sources, having more does not hurt as long as you pay on-time. Along with paying on-time your should observe the rule of maintaining a balance at no more than 75% of the limit. Applying for new credit every week will lower your score more.

2. Using Credit to Build a Credit Score – Remember to keep your balances lower and manageable. The credit bureau only receives reports regarding your balances and payments. Making your payments on-time builds your credit history strength and score.

potential creditors. Hard inquires appear on all credit reports. All inquires disappear from the report after two years. Only individuals with a specific business purpose can check your score. Creditors, lenders, employers and landlords are some examples of approved business people. The inquiry only appears on the credit report that was checked. For example, if a landlord uses Experian to check the creditworthiness of an applicant, the credit check will only appear on Experian’s report, not TransUnion or Equifax. To limit the number of soft inquires made on your credit report, contact the credit reporting agencies and request that they remove your name from marketing distribution lists.

Summary GET CREDIT FIT. Having and maintaining good credit is a process. Like getting in and staying in shape, it doesn’t happen overnight. It’s something you need to continuously work at, nurture and track. In the banking and finance sector you, as consumers/borrowers, have absolutely ZERO control over how the lenders and the Bank of Canada will adjust the interest rates or if an employer will absolutely 100% be granting you a raise on a yearly basis or what the real estate market trends are currently doing. You do however have absolute 100% control over you credit history and score. Treat it like a loved-one; always check on it, keep it forever (credit cards especially) and don’t cancel/open others. Increase the limit through the years and feed it regularly (use the credit and re-pay it). Without (strong) credit you will not be able to purchase items that require a soft or hard credit check and poor credit will only give you access to higher rates. If you have no credit it will be impossible to get a mobile phone, new car or even rent a home, let alone buy a new home. By building and maintaining your credit you will ensure that you have given yourself the best chance at obtaining credit and the lowest possible mortgage interest rate.

For a comprehensive (no charge) review of your credit report please contact me.

Darick 
705-623-8658 

How To Repair, Increase and Maintain Your Credit (The Do’s and Don’ts)

Credit scores are like report cards for grown-ups. The score you get ranges from 300 to 900. Your score indicates your creditworthiness to potential lenders, banks, landlords, insurance companies, and even to some employers, for instance. The higher your score the better. A score of 700 or better is needed to get the best rates.

2. NEVER Miss a Minimum Payment – Because this attributes to 35% of your overall score, delinquencies have the biggest negative effect on your credit score. If you have overdue bills, make the necessary arrangements with your creditors. They would much rather work with you than file collections against you. If you can’t pay it all back, it’s better to pay some. The attached image is a statistical analysis of what happens when lenders issue credit to borrowers with lower scores. 78% of all credit that goes unpaid over 90 days late is to borrowers who have a score of 499 or less. If your score is 800 + you are going to be 90 days late on a payment less than 1% of the time. Mortgage financing and credit is a numbers game!

What is a Credit Score and How is it Calculated?
 

The credit score is used by lenders to predict the probability of you repaying your monthly expenses and mortgage; how credit worthy are ‘you’? Credit scores range from 300 to 900, 70% of Canadians have a score between 700 and 850. There are 5 components that make up your score; Payment History, Amounts Owed, Length of credit history, New Credit and Types of Credit in Use.

How Is Your Credit Score Calculated

The exact breakdown of the calculation for how the Beacon or FICO score has never been released, but it is common knowledge that there are 5 categories, each weighed and allocated differently to come up with your score of creditworthiness;

2. Balances or Amount Owed 30% – When you apply for credit, the amount of consumer debt you owe really matters to a lender. If you are close to maxing out all of your credit cards or your line of credit, this could be a sign that you are in financial distress, and it means that you are a higher risk to lenders—statistically speaking. This is why the amounts that you owe on your debts make up 30% of your credit score. This part of your credit score will look at the amounts you owe on each credit card, line of credit and loan you have. It will look at the number of accounts you have with balances and what percent you are using of each of your credit limits. If you are using 75% or more of your credit limit on a credit card or line of credit, this is seen as a sign of trouble and your credit score will be negatively impacted.

3. Length of Credit History 15% – If you have had credit available to you for a long time, your credit report should provide an accurate picture of how you use it. For someone who has not had credit for very long, it is difficult to tell if they really know how to use credit responsibly. Time is needed to get a true picture of how responsible someone is with credit. This is why the length of your credit history is the third most important factor in your credit score calculation. It will usually make up 15% of your credit score. Your score will reflect how long it has been since you first obtained credit, how long each item on your credit report has been reporting and whether or not you have active credit right now. If you have recently obtained credit for the first time, your credit score will not be very strong. However, if you have been responsibly using credit for many years, this factor will really work for you. If you have been involved in a bankruptcy, consumer proposal or debt management program, your credit history will essentially restart whenever you complete your program (the record of your program also has to fall off your credit report for you to get a good credit score). Closed creditors will remain on your credit history for 6 years.

4. New Credit Inquiries 10% – If you are frequently applying for credit, your creditors want to know. This can mean that you’re in a desperate financial situation, and this could mean that you are now a riskier customer to your creditors. This is one reason why new credit and credit inquiries compose around 10% of your credit score. This part of your credit score will take into account the number of credit accounts you have opened recently, the number of recent credit inquiries, the time since any new accounts were opened and the time since your most recent credit inquiries. This part of your credit score will also evaluate whether or not you are re-establishing good credit history follow past payment problems.