Can you get away with poor credit?

[Brian Tran]

Hello,

I'm in a position where I have low debt because I have high utilization from my student loans that I am trying to catch up payments on. My question is if my strategy is to buy and hold where would my credit matter? I've had people suggest to me to take an FHA loan, but I don't know if it's wise advice considering I'd have a high-interest rate. Also, does the required property insurance take account of your credit? What other things would I need to worry about from start to finish with credit? I am improving my credit, but of course, it will take time. I wanted to be aware of what my credit would affect in a rental property deal.

[Aaron K.]

FHA will only work for a rental if you live on the property as well. The biggest thing your credit score will affect is the interest rate you pay and the amount that you are preapproved for. To be frank if your credit score is low the biggest hurdle will be your preapproval amount because it may not be enough to afford a property that meets FHA guidelines or your standards for living there.