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Does Applying For a Mortgage Affect Your Credit Score?
July 1, 2025
Quick Answers
Applying for a mortgage initiates a hard inquiry on your credit report, which typically results in a minor and temporary decrease in your credit score.
Credit scoring models consolidate multiple mortgage inquiries made within a short period (usually 14-45 days) into a single event, allowing you to shop for rates without significant penalty.
In the long run, consistently making on-time mortgage payments can positively affect your credit history and improve your overall score.
What Does It Mean to Apply for a Mortgage?
Applying for a mortgage is the formal process of requesting funds from a lender to purchase real estate. This requires you to submit a detailed application covering your income, assets, employment history, and existing debts. As part of this underwriting process, the lender will also perform a hard inquiry on your credit report to assess your financial reliability.
The lender uses all of this information to decide whether to approve your loan, how much you can borrow, and what your interest rate will be. Your credit score is a key factor in this evaluation, directly influencing the terms you are offered. The application culminates in the lender's official decision, which can be an approval, a denial, or a request for additional documentation.
How Applying for a Mortgage Can Affect Your Credit Score
Applying for a mortgage triggers a hard credit inquiry, which can cause a temporary dip in your credit score. Understanding this process helps you manage your financial health during your homebuying journey.
The Hard Inquiry: When you formally apply for a mortgage, the lender pulls your full credit report from one or more credit bureaus. This action is recorded as a "hard inquiry" on your report.
Initial Score Impact: A single hard inquiry typically causes a minor, temporary drop in your credit score, usually by five points or less. This reflects the new risk you are seeking to take on.
Rate Shopping Window: Credit scoring models recognize that consumers shop for the best rates. Multiple mortgage inquiries within a short period (typically 14 to 45 days) are usually treated as a single event, minimizing the impact.
Long-Term Effects: Once you secure the loan and begin making timely payments, the new mortgage can positively affect your score. It diversifies your credit mix and builds a strong payment history over time.
How Much Will Applying for a Mortgage Affect Your Credit Score?
The exact impact of a mortgage application on your credit score can vary based on several factors. Here are a few key things to consider:
- Hard Inquiries. Each mortgage application typically results in a hard inquiry on your credit report. This can cause a small, temporary dip in your credit score, usually by just a few points.
- Rate Shopping Window. Scoring models treat multiple mortgage inquiries within a short time frame as a single event. This allows you to shop for the best rates without significantly harming your credit score.
How You Can Avoid Applying for a Mortgage Affecting Your Credit Score
Shop Within a Short Window
Credit scoring models often treat multiple mortgage inquiries within a 14 to 45-day period as a single event. This allows you to shop for the best rates from various lenders without each application individually damaging your credit score, letting you compare offers wisely.
Opt for Pre-Qualification First
A pre-qualification provides an estimate of your borrowing power based on self-reported information. This step typically involves a soft credit check, which does not affect your score, unlike a pre-approval that usually requires a hard inquiry from the lender to verify your financial standing.
Choose the Right Card to Applying For A Mortgage
Improving your credit score is a crucial step toward better financial health, and fortunately, it's an achievable goal for everyone. By following a few proven methods, you can see meaningful changes and unlock better financial opportunities.
- Monitor your credit reports regularly. Obtain free reports from all three major bureaus to identify and dispute inaccuracies, detect potential identity theft, and track your progress.
- Establish automatic bill payments. Your payment history is the most significant factor influencing your score, so setting up automatic payments helps ensure you never miss a due date.
- Reduce your credit utilization ratio. Aim to keep your balance below 30% of your total available credit, as a lower ratio is viewed favorably by lenders.
- Become an authorized user. Being added to a credit card account with a long, positive history can help improve your own score as that history may be reflected on your report.
- Diversify your credit mix. Lenders like to see that you can responsibly handle different types of credit, such as installment loans and revolving credit cards.
The Bottom Line
A mortgage application triggers a hard inquiry, which can temporarily lower your credit score. To minimize the impact, submit all applications within a short period, as they're often treated as one.
Frequently Asked Questions
Will multiple mortgage applications hurt my credit score?
Not necessarily. Credit scoring models typically treat multiple mortgage inquiries within a short period, usually 14-45 days, as a single event to encourage rate shopping.
How long does a mortgage inquiry stay on my credit report?
A hard inquiry from a mortgage application remains on your credit report for two years, but it generally only affects your FICO score for one year.
Can I check my own credit without it being affected?
Yes, checking your own credit is a soft inquiry and does not impact your score. It's wise to review your report for accuracy before applying.
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