Does a pre-approval affect my credit score?
A mortgage pre-approval can have a hard inquiry on your credit score if you end up applying for the credit. Although a pre-approval may affect your credit score, it plays an important step in the home buying process and is recommended to have.
The good news is that this ding on your credit score is only temporary. If you keep paying your monthly bills on time and keep your credit card debt low, your score will recover quickly from whatever small drop it suffers.
You don’t have to worry about shopping around for a mortgage, either. If you apply for a mortgage loan with several lenders in a short period, your score won’t drop every time these lenders check your credit. Because you are searching for just one loan, each of the credit pulls from different lenders will count as just one hard inquiry. So even if you get pre-approved with, say, three lenders, your credit score will drop by just a small number of points.
Just make sure to apply for all your pre-approvals within a few days of each other. That way, each hard inquiry will be counted as a single inquiry for credit-scoring purposes.
And don’t let that small credit drop prevent you from getting pre-approved. The benefits of getting preapproved, such as knowing how much home you can afford, far outweigh the tiny drop your credit score will take.
David Conti | Senior Loan Officer
781-474-5068 • dconti@leaderbank.com
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