 TITLE: Can a Broken Lease Affect Buying a House? CONTENT: Can Breaking a Lease Affect Your Ability to Apply for a Mortgage?\n-----------------------------------------------------------------\nBreaking a lease won't show up on your credit report. However, if you don't pay your outstanding charges and your account is sold to a collection agency, that debt will appear on your credit report.\nAn account in collections has a negative impact on your credit that can make it harder to get favorable terms on a mortgage loan. Because collection accounts remain on your credit report for seven years, they can affect your credit far into the future. (Silver lining: As they age, collection accounts have less impact on your credit score.)\nYou may have been instructed by a real estate professional to pay off any collections before you close on a mortgage. Fannie Mae and Freddie Mac, the major government-backed mortgage companies, do not require borrowers to pay off collection accounts before single family home mortgage approval, and paying off accounts in collections may not improve your credit score either. Credit bureaus aren't required to remove paid accounts from your credit report. Newer credit scoring models, including FICO 9 and VantageScore 3.0 and 4.0, ignore collections that have a zero balance, but older credit scoring models—including the ones typically used by mortgage lenders—do not.\nBroken leases often appear in your tenant screening report, which some mortgage lenders review when considering your loan application. Even if they don't, the lender may ask your previous landlords about your payment history, and a broken lease may prevent them from giving you a glowing evaluation when a mortgage lender calls. END