Does mortgage pre-approval affect credit rating? Here’s what you need to know


When you’re shopping for your new home, a mortgage pre-approval will not only tell you what you can afford, but can also help you stand out as a serious buyer. However, you’ll want to protect your credit score while you search for the best rate.

So, does a mortgage pre-approval affect credit rating? Here’s how getting pre-approved affects your credit score and how to shop around for a mortgage without hurting your credit.

What does it mean to be pre-approved for a mortgage loan?

A mortgage pre-approval is a letter from the lender stating that you are generally qualified for a mortgage loan. The lender will assess your income, debts, assets, and credit history and determine the interest rate you qualify for and the amount of money you can borrow based on the loan program you are applying for.

Although a mortgage pre-approval does not guarantee a loan offer, including a pre-approval letter with your offer strengthens your offer. This shows the seller that you are a serious buyer and have enough credit to qualify for a home loan.

How does a mortgage pre-approval affect credit rating?

By getting pre-approved for a mortgage loan, you authorize the lender to pull your credit report from the three major credit bureaus – Experian, TransUnion and Equifax. When a lender asks to review your credit report, it is recorded as a serious request.

Serious inquiries will temporarily affect your credit score and remain on your credit report for approximately two years. Inquiries tell lenders how often you apply for credit.

Credit inquiries have a small impact on your credit score. Although the impact varies from person to person depending on credit history, a single request will reduce your score by up to five points, according to FICO. Inquiries play a minor role in risk assessment and only make up 10% of your FICO credit score.

Mortgage purchases are generally considered a positive financial decision by credit score models, and multiple credit checks with mortgage lenders within 14-45 days will only be logged as one request. This allows buyers to shop around and get mortgage pre-approval from multiple lenders without significantly impacting their credit score.

There are also informal inquiries, but these usually occur when a lender provides a rate estimate or when you view your own credit report. Informal inquiries do not affect your credit score.

Find out if you qualify for a mortgage with Total Mortgage. We have branches across the United States where you can speak to our mortgage consultants. Find a Total Mortgage branch near you.

Is being prequalified hurting your credit?

A mortgage prequalification is an estimate of what you might be able to borrow on a mortgage using basic financial information. Pre-qualifications are considered less reliable than a mortgage pre-approval because the information is generally unverified.

Prequalifications are usually based on self-reported information or the lender may do a soft pull on your credit report. If there is no serious demand, prequalification will not hurt your credit.

Is applying for a mortgage hurting your credit score?

Similar to a mortgage pre-approval, the mortgage application involves a thorough investigation of your credit report, which could lower your credit score by a few points. If you complete multiple mortgage applications within the 14-45 day purchase window, it will only count as one application.

The mortgage shopping window only applies to credit checks from mortgage lenders or brokers’ credit cards, depending on the Consumer Financial Protection Bureau, and other inquiries will appear separately on your credit file.

After taking out a new mortgage, your credit score may go down temporarily. For this reason, it may be difficult to obtain other loans or with the terms that you prefer. You may have to wait several months before applying for a larger loan.

On the other hand, a mortgage can also help you build your long-term credit if you make timely payments.

How to shop for a mortgage without hurting your credit?

You can always find the best rate without hurting your credit if you use the right strategy. Here are a few moments on how to shop around for a mortgage without hurting your credit.

  1. Check your credit report: If you check your credit report before applying for a mortgage, you can take steps to improve it or correct errors. This can help put you in the best position to get the lowest rate. You can get a free copy of your credit report from the three major credit bureaus once a year at
  2. Repay any debt: Paying off your debts can improve your debt-to-income ratio, which can also increase your credit score. A better DTI may also qualify you for a larger mortgage with a lower interest rate.
  3. Pay your bills on time: Payment history is 35% of your FICO score, making it the most important determinant of your credit score. If you don’t pay your bills on time, your score could suffer. Late payments can also stay on your credit report for up to seven years.
  4. Do not apply for new credit: Multiple inquiries for different types of credit can negatively affect your credit score. Wait until you’ve closed your mortgage before opening a new credit card or taking out a car loan.
  5. Shop in a short time: Apply for a mortgage within the mortgage shopping window to minimize any impact on your credit. However, having one or two inquiries outside of this time frame is not a big concern. It’s usually worth doing some extra investigation if it means finding the lowest rate.

Apply for a mortgage today with Total Mortgage

Does mortgage pre-approval affect credit rating? Yes, but not a lot and only for a short period of time. Also, if you apply for a mortgage in the mortgage shopping window, it will only count as one application on your credit report.

If you are looking to buy a home, you can get a free quote and apply online with Total Mortgage. Make an appointment with one of our mortgage experts to learn more about your options.

Carter Wesman

Carter Wessman hails from the charming town of Norfolk, Massachusetts. When he’s not busy writing about mortgage-related topics, you can find him playing table tennis or playing bass guitar.


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