Does Mortgage Preapproval Impact Your Credit Score?
- V Nation Corp
- Oct 15, 2024
- 1 min read
Mortgage preapproval can slightly impact your credit score due to a hard inquiry, but the effect is temporary. The benefits, such as showing sellers you’re a serious buyer and setting a realistic home budget, outweigh the small dip.
How Preapproval Works:
Submit financial documents like bank statements, tax returns, and pay stubs.
Receive a preapproval letter stating how much you can borrow.
Preapproval vs. Prequalification: Preapproval is more reliable because lenders verify your financials, unlike prequalification, which is based on self-reported info.
Multiple Lender Inquiries: If done within a short period, multiple inquiries are counted as one, minimizing the score impact.
Bottom Line: Though your credit score may temporarily dip, getting preapproved is a key step in buying a home.
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