Does Getting Preapproved Hurt Your Credit?
When contemplating about buying a home the first step a consumer should take is speaking with a lender and obtaining a preapproval from them. Most real estate agents will not even show houses to you unless you have a preapproval and seller’s will show more serious consideration to an offer with a preapproval versus an offer without one.
When you do meet and speak with a lender about a preapproval, they will ask you questions about your credit, employment, income and assets. They will also need to pull a credit report and review your credit score. Typically, when a lender pulls a credit report it is considered a hard pull because the bureaus (TransUnion, Experian and Equifax) view this as you possibly creating a debt with a monthly payment attached. Your credit score will be reduced by 3 – 8 points but this is only temporary and will rebound in 30 days or less. Also, once your credit is pulled a first time you have 30 days to speak to as many lenders as you want and have them pull credit as well without affecting your scores. Your lender will also ask for some documentation to validate what you have verbally represented.
Don’t let a small decrease stop you from knowing what you can be preapproved for. The benefits of knowing exactly what you can be approved for far outweighs anything else.
As always, speak to a trusted mortgage professional to learn more about preapprovals such as the Home Loan Advisors at Hall Financial.