Will a mortgage application hurt my credit?

Short answer: one mortgage credit check has a small, temporary effect. Applying at five different places over two months is what leaves a mark. Here is how it works and how to shop without hurting yourself.

One check, many lenders

When you apply through us, we pull your credit report once, with your consent. That single report is what we use to place your file with the lender that fits. The lenders we approach rely on our pull; you are not checked separately by each one. This is one of the practical advantages of a broker over walking into three banks.

What the score sees

A mortgage inquiry is a “hard” inquiry and can lower a score by a few points for a short time. Credit scoring models also recognize rate shopping: several mortgage inquiries within a short window are commonly treated as one event. A single application, or a small number close together, is not a problem.

What does hurt: many applications for different kinds of credit over a few months, new credit cards opened while you are pre-approved, missed payments, and balances climbing on cards and lines of credit. Lenders look at the report again before funding, and the number one way a pre-approved buyer loses the approval is a new car loan between the offer and the closing.

While you are house hunting

• Do not open new credit or take on new payments.
• Keep card balances low, ideally under a third of the limit.
• Pay everything on time, including the small bills.
• Do not close old accounts; length of history helps.
• If something is wrong on your report, tell us before the lender finds it.

If your credit is not strong

A lower score narrows the lenders and can raise the rate, but it does not end the conversation. Some lenders price for it; some situations need six months of repair first. We look at the report with you and tell you which. Book a conversation and bring nothing but questions.