To get a low mortgage rate, your credit score matters. Here's how to boost it

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    If you are in the market for a new house, you may be overlooking one key to your success: your credit score.

    That three-digit number has a direct impact on your ability to get a mortgage and what interest rate you will pay.

    Mortgage rates are at two-month lows, with the benchmark 30-year fixed loan at 3.11%, according to Bankrate. On Wednesday, the Federal Reserve announced it will continue to keep short-term interest rates near zero, which means mortgage rates should stay low.

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    To get that low rate though, you’ll have to have a good credit score.

    “Even a quarter point or half point can make a really big difference over the long haul on a large loan amount,” said Ted Rossman, senior industry analyst at Bankrate and CreditCards.com.

    Credit scores range between 300 and 850. A good score is between 670 and 739, very good is from 740 to 799, and 800 and up is considered excellent, according to FICO, a leading credit-scoring company.

    Home buyers who took out mortgages in the fourth quarter of 2020 had a median score of 786, according to the Federal Reserve Bank of New York.

    If you don’t measure up, it doesn’t necessarily mean you are shut out of the market. There are several moves you can make to improve your score.

    First, check your credit history

    You are allowed one free credit report a year from the three main credit-scoring companies: Experian, Equifax and TransUnion. You can reach out to each directly or you can access them through annualcreditreport.com.

    Not only should you know your score, you should also make sure there are no mistakes or unintended skeletons in your closet, like a missed payment you forgot about.

    Pulling your report before you apply for a mortgage or pre-approval, ideally a few months in advance, will give you time to correct any issues.

    Pay bills on time

    Late or missed payments can knock down your score.

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