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Can I Qualify without Hurting My Credit Score?

To perform a pre-approval, we must order your credit report, and this results in a credit inquiry appearing on your report. Each lender you contact may order its own credit report, resulting in an additional inquiry each time. You know that credit inquiries affect your credit score, so how will this affect your ability to qualify for a mortgage?

First, let't look at the impact of a credit inquiry. The FICO scoring model used by mortgage lenders is a trade secret, but the rule of thumb is that an inquiry will reduce your FICO score by 3 to 5 points. In most cases, that doesn't make a significant difference in your ability to qualify and probably won't change your interest rate.

But that's one inquiry. What if you shop multiple lenders? The FICO model includes something the developers call the "deduplication window." It assumes that all credit inquiries from mortgage companies that occur within 45 days are associated with you shopping for your mortgage. The first inquiry is the only one that impacts your score. Thus, you needn't worry about shopping.

Note that this shopping window also applies to auto and student loans.