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If a Lender Pulls My Credit, Won’t it Lower My Credit Score?

Are you pre-approved for your home purchase?

If not, you need to be, and no, it won’t affect your credit rating.

In today’s real estate market, serious buyers know that the home buying process cannot begin until they are pre-approved, not pre-qualified for a mortgage.

Pre-qualification is based upon “stated” numbers regarding monthly revolving debt, income, and other general information whereas pre-approval is based on verified facts. In the verification process for pre-approval lenders must make inquiries on employment and even check your credit score.

Luckily the Fair Credit Reporting Act recognizes this as a permissible and valid reason for a company to access your credit and it will NOT affect your credit rating or score. Mortgage lenders can run a “soft” credit check, sometimes called a “quotation check” to verify your credit worthiness and pre-approve you for a home purchase. Multiple lenders can do this (within a 14 day period) without it affecting your credit score, should you wish to compare loans. You can also check your own credit report as many times as you would like without damaging your credit score. In fact, before meeting with a lender or considering a home purchase,  you should evaluate your credit report and make sure it is error free.

Other types of credit inquiries CAN affect your credit report, so refrain from opening lines of credit at clothing, furnishing stores or car dealerships and other installment retailers until your loan is funded. Credit inquiries account for less than 10% of your overall credit score, but it is still not worth the risk when purchasing a home is in your near future. To keep yourself credit-worthy, make your payments on time, continually strive to increase your income, and make sure the monthly amount accessed on each of your credit cards is less than 30%. These proactive measures will go a long way to helping you secure the loan you need and the home you want.

The Pruett Group not only specializes in finding our clients the best deals on San Diego real estate, but we know what it takes to get a property financed, even in the tightest credit markets. Whether you are buying or selling a property,  our personal service and professional experience will allow you to achieve your goals. Contact us at (858)- 531-1119. We would be pleased to serve you.


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