Getting preapproved for a mortgage usually requires a hard credit inquiry, which can cause a small, temporary change in your credit score.
That doesn’t mean you should avoid preapproval or shop with only one lender. Credit-scoring models recognize that mortgage borrowers compare offers, so multiple mortgage inquiries made within a limited rate-shopping window are generally grouped together for scoring purposes.
The practical takeaway: get your credit in good shape first, then concentrate your mortgage shopping into a relatively short period.
Key Takeaways
- Mortgage preapproval usually involves a hard credit check that may temporarily lower your score.
- Multiple mortgage inquiries made within a rate-shopping window are generally treated as one inquiry for scoring purposes.
- Shopping with several lenders can help you compare rates, fees and loan terms without multiplying the credit impact if you shop within the applicable window.
Does Mortgage Preapproval Affect Your Credit Score?
Usually, yes — but the effect is generally limited.
A traditional mortgage preapproval involves a lender reviewing your financial information and credit history to determine whether you appear eligible for a mortgage and, if so, approximately how much you may be able to borrow.
That process typically includes a hard credit inquiry.
The Consumer Financial Protection Bureau says a lender inquiry generally has a small negative effect on credit scores. Hard inquiries also remain visible on your credit reports for a period of time, even after they stop affecting your score.
The exact impact varies based on your credit profile and the scoring model being used.
How Many Points Does a Mortgage Preapproval Lower Your Credit Score?
There isn’t one number that applies to every borrower.
FICO says a single hard inquiry typically lowers a score by fewer than five points for most people, although the impact can be different depending on your overall credit history.
People with relatively little credit history or several recent credit applications may be affected differently than borrowers with long, established credit profiles.
The inquiry itself is also only one part of your score. Payment history, amounts owed, account age and other credit factors generally have much more influence.
Does Getting Preapproved by Multiple Lenders Hurt Your Credit?
Not the same way that applying for several unrelated types of credit can.
Credit-scoring models are designed to recognize mortgage rate shopping.
The CFPB currently advises that multiple mortgage credit checks within a 45-day period are generally treated as a single inquiry for credit-scoring purposes.
FICO adds an important qualification: newer FICO models use a 45-day rate-shopping window, while some older versions use a 14-day window.
Because you generally don’t know which scoring model every lender will use, completing your mortgage shopping within about two weeks when practical is the more conservative approach. A longer shopping process can still be worthwhile, but additional inquiries outside the applicable window could be scored separately.
Why Should You Shop With Multiple Mortgage Lenders?
Mortgage pricing isn’t identical from one lender to another.
Different lenders can offer different:
- Interest rates
- Discount points
- Origination charges
- Lender credits
- Loan programs
- Mortgage insurance pricing
- Closing timelines
That means minimizing credit inquiries shouldn’t come at the expense of comparing mortgage options.
The CFPB specifically encourages borrowers to shop around because even though another inquiry may have a small effect on credit, differences in mortgage pricing can have a much larger financial impact over time.
Prequalification vs. Preapproval: Which One Affects Your Credit?
Prequalification and preapproval are often used casually, and individual lenders may define the terms somewhat differently.
Generally, however:
| Prequalification | Preapproval | |
|---|---|---|
| Financial review | Usually preliminary | Generally more detailed |
| Documentation | May rely heavily on information you provide | Usually includes verification of financial information |
| Credit inquiry | Often soft inquiry | Typically hard inquiry |
| Credit-score impact | Usually none from the inquiry | May cause a small, temporary change |
| Loan guarantee | No | No |
A soft inquiry does not affect your credit score.
A hard inquiry can.
If protecting your score before you’re ready to shop seriously is a priority, ask whether a lender’s initial process involves a soft or hard inquiry.
Our guide to mortgage prequalification vs. preapproval explains the distinction in more detail.
What Does a Lender Review for Mortgage Preapproval?
Credit is only part of the preapproval process.
A lender may review information including:
- Income
- Employment history
- Assets
- Existing debts
- Credit history
- Credit scores
- Available funds for the down payment and closing
The lender may request documents such as pay statements, W-2s, tax returns, bank statements or other records depending on how you earn income and which mortgage program you’re considering.
There isn’t one universal checklist that applies to every borrower.
Self-employed borrowers, for example, can have different documentation requirements than borrowers receiving regular W-2 wages.
If you’re preparing to apply, this mortgage preapproval guide explains the basic process and documentation lenders may request.
Does Your Credit Score Determine How Much Mortgage You Can Get?
Not by itself.
Your credit profile can influence whether you qualify for a particular loan program and the pricing available to you.
But lenders also consider factors such as:
- Income
- Monthly debt payments
- Debt-to-income ratio
- Down payment
- Assets
- Loan type
- Property information
Your debt-to-income ratio, for example, compares qualifying monthly debt obligations with gross monthly income and is an important part of mortgage underwriting.
A high credit score alone doesn’t establish your maximum loan amount.
How Long Does a Hard Inquiry Affect Your Credit?
A hard inquiry can remain on your credit report for up to two years.
That doesn’t mean it affects your score for the entire two years.
FICO says its scoring models consider hard inquiries from the previous 12 months. The score impact is generally greatest when the inquiry is recent and tends to diminish over time.
What Is the Mortgage Rate-Shopping Window?
The rate-shopping window is the period during which multiple mortgage inquiries can be grouped together rather than treated as separate attempts to take on multiple debts.
The exact window depends on the scoring model.
- Newer FICO models generally use a 45-day window.
- Older FICO models can use a 14-day window.
- The CFPB generally advises consumers that mortgage inquiries within a 45-day period are treated as one inquiry for scoring purposes.
If you want to account for differences among scoring models, try to complete lender comparisons within 14 days when practical.
That doesn’t mean you should accept a worse mortgage solely because you’re approaching the end of a shopping window. The potential cost difference between mortgage offers can outweigh the small score effect of another inquiry.
Can You Check Your Own Credit Without Hurting Your Score?
Yes.
Checking your own credit is a soft inquiry and doesn’t lower your credit score.
Reviewing your reports before applying for a mortgage can give you time to identify inaccurate information or other issues before a lender checks them.
Consumers can obtain their official credit reports through AnnualCreditReport.com.
How to Protect Your Credit Before Getting Preapproved
You don’t need to avoid normal financial activity entirely, but the period before and during a mortgage application isn’t usually the best time to make major credit changes.
Check Your Credit Reports
Review your reports for inaccurate balances, accounts you don’t recognize or other errors.
Make Payments on Time
Payment history is an important credit-scoring factor. Continue making all required payments by their due dates.
Keep Credit Card Balances Under Control
High revolving balances can increase your credit utilization and affect your scores.
Avoid Unnecessary New Credit
Opening a new credit card, financing a vehicle or taking out another loan can create another inquiry and change your debt obligations.
That can matter for both your credit profile and mortgage underwriting.
Do Your Mortgage Shopping in a Concentrated Period
Once you’re ready for lenders to pull your credit, compare mortgage options within a relatively short window.
That lets you take advantage of rate-shopping treatment while still comparing multiple lenders.
Does Preapproval Guarantee You’ll Get the Mortgage?
No.
A mortgage preapproval is preliminary. It is not final loan approval.
Final approval can depend on additional underwriting and conditions including:
- Updated income and asset documentation
- The specific property
- Appraisal results
- Title
- Insurance
- Changes to debts or credit
- Other loan-program requirements
A preapproval can still be useful because it gives you and sellers an indication that a lender has reviewed important parts of your financial profile.
Our guide to getting preapproved for a home loan covers what the letter does and doesn’t mean.
Can Your Credit Be Checked Again After Preapproval?
Yes.
A lender may review your credit again during the mortgage process, particularly before closing.
That’s one reason to avoid major changes such as opening new accounts, taking on substantial new debt or missing payments after you’ve been preapproved.
Something that materially changes your credit or monthly debt obligations can affect underwriting even if the original preapproval looked strong.
Should You Get Preapproved Before House Hunting?
Preapproval can be useful when you’re ready to make serious offers.
It can help you understand your potential financing range and demonstrate that you’ve already gone through a preliminary lender review.
But there’s little reason to trigger a hard inquiry months before you expect to buy if you’re still in the very early research stage.
You can begin by checking your own credit, estimating affordability and gathering documentation. A home affordability calculator can help you explore different price and payment scenarios before you’re ready for formal preapproval.
Bottom Line
Getting preapproved for a mortgage usually involves a hard credit inquiry, so it can cause a small, temporary change in your credit score.
That shouldn’t prevent you from shopping around.
Mortgage credit-scoring models generally group multiple inquiries made during a rate-shopping period rather than treating each lender comparison like an unrelated application for new debt.
Keep your lender shopping concentrated, compare the complete mortgage offer rather than just the interest rate and avoid unnecessary new debts while you’re preparing to buy.
FAQ
Does mortgage preapproval hurt your credit score?
Usually, a mortgage preapproval requires a hard credit inquiry, which can cause a small, temporary decrease in your score. The exact effect depends on your credit profile and scoring model.
How many points does preapproval lower your credit score?
There isn’t a universal number. FICO says one hard inquiry typically lowers a score by fewer than five points for most consumers, although individual results can vary.
Can I get preapproved by multiple mortgage lenders?
Yes. Mortgage-scoring models account for rate shopping, so multiple mortgage inquiries made within the applicable shopping window are generally grouped together for scoring purposes.
How long do I have to shop for a mortgage without multiple credit hits?
The window depends on the scoring model. Newer FICO models generally use 45 days, while older versions can use 14 days. Completing your lender shopping within about two weeks when practical provides a conservative window across FICO versions.
Does mortgage prequalification hurt your credit?
Prequalification commonly uses a soft credit inquiry, which doesn’t affect your credit score. Practices vary by lender, so ask whether the lender will perform a soft or hard inquiry.
Can I check my own credit without lowering my score?
Yes. Checking your own credit is considered a soft inquiry and doesn’t lower your credit score.
Does a mortgage preapproval guarantee approval?
No. Preapproval is preliminary. Final mortgage approval depends on complete underwriting, the property, appraisal and other loan requirements.
Will my lender check my credit again before closing?
It can. Lenders may review credit again during the mortgage process, so avoid unnecessary new debts, accounts or missed payments between preapproval and closing.
