Does Getting Pre-Approved Hurt My Credit

Mortgage Pre-Approval


This short article will discuss the process of a pre-approval and the possible effect it may have on your credit score.

When starting the home search process, it is highly recommended you speak with a trusted mortgage lender or broker. In speaking with them it is recommended you complete the preapproval process so you know exactly how much of a mortgage you can afford before you start looking for a home. Real estate agents almost require the preapproval before showing you homes to know you are qualified.

A preapproval verifies your income, assets and most importantly your credit. They will ask to pull your credit report in which they will receive 3 credits scores from the 3 largest credit repositories – TransUnion, Equifax and Experian. The lender will utilize the middle score as the credit qualifying score. When the lender requests credit it is considered a hard credit pull meaning the inquiry is for a significant financial event possibly resulting in new credit being open. In this case a mortgage. Your credit score will decrease your score anywhere from 3 – 8 points. Usually, your score will go back up in less than 30 days.

Once a lender pulls the first report, there is a 30-day shopping period whereby any other lender can pull your credit report and there will be no effect on your score for the inquiry. In essence, credit bureaus know consumers will and should shop other lenders to obtain the best terms.

As always, Hall Financials’ Home Loan Advisors are here to help in this process and answer any questions you may have.