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Credit Reports

During the home buying or leasing process, the biggest factor that will play into your mortgage rates, insurance premiums, and more will be your credit score. Your credit score is based on an analysis of all of your credit files, ultimately leading to a number that can range from bad to excellent. It’s important to track your credit score and try to improve it before your rental or buying process. 

To check your credit score you can do a number of things. The Fair Credit Reporting Act allows you to get one free copy of your credit report every 12 months. You should always utilize this to make sure that the information is accurate and complete.

A good credit score which ranges from 690 + will have a huge impact on your ability to get a loan and lower your interest rates. The Federal Housing Administration requires a credit score of at least 500 to get approved by a loan through them. At 500 - 579 you are required to pay a 10% down payment. At just 580 or above you’re only required to pay 3.5%. This should give you a sense of how much your credit score impacts you. Many other lenders will require your score to be at a minimum of 620 just to qualify.

There are a number of ways to improve your credit score before applying for a loan or looking into insurance policies. Paying your bills on time, keeping low balances on credit cards, and paying off your debt are easier ways to begin building your credit. Some records, such as delinquencies, will stay on your credit report for seven years. It may take years to improve your credit score so it’s in your best interest to start as soon as possible.