Question about pre-approval process...

Is it true that when someone checks your credit it impacts your credit score so that when the bank checks for the pre-approval process it has a negative impact so you don't want to constantly be doing it and therefore since it is only good for 60 days you should wait until you are really interested...

This is what I was told today wanted to see if it was accurate...

Re: Question about pre-approval process...

It will not affect your score if you do searches within a certain period.

Re: Question about pre-approval process...

You're allowed a certain number of credit checks within a 2-week period and it counts against your score as one check. The credit bureaus understand that while you're shopping for a loan you'll go to several sources.

Btw, we just went through this but got pre-approval once in Oct., once in Nov., twice in Dec. (once at a 3rd bank and then back at the 1st because it had been 2 months). Then I got a Verizon Wireless account and they checked my credit in January. So my score should have been lowered 4 times... and went down a total of 10, maybe 15 points total. Certainly nothing that got me in trouble in terms of getting a loan.

Re: Question about pre-approval process...

you are allowed as many as you want within a 30 day period, and it will not lower your credit score.

but if you go outside of that window each time only lowers it 1-3 points. so if you have really good credit, you don't need to worry about it.

we had our credit run numerous times because each time we found a house and started the process over it was a few months in between. our credit scores are still very good

Re: Question about pre-approval process...

So then as long as we have good credit scores to begin with it doesn't matter if we keep getting pre-approved every two months for like a year? It won't make any significant difference on our credit?

Re: Question about pre-approval process...

Why would you get pre-approved every 2 months for a year? You're planning on going to 24 banks?

They all offer pretty similar products, in my experience. The *day* changes mortgage rates way more than individual banks do. Rates will change more from a Monday to a Friday than they will from Chase to HSBC on the same day. Go to 3 or so, see what loan officer you feel most comfortable with and what fees they charge - all within a few hundred dollars of each other, in my experience - and then start looking for your house already!

Also, banks don't just look at your score, they look at your credit history. So when you decide on a bank and go with them, they will want to know what the heck you've been doing. You will have to write a letter for every credit check you've had in recent history, explaining why the institution checked your credit and if you took out any lines of credit with each. That's a lot of letters you're going to have to write!

Message edited 3/19/2010 6:26:58 AM.

Re: Question about pre-approval process...

The pre-approval just shows how much a bank/mortgage company will lend you. Unless you're paying off some significant debt every 2 months (that would increase the amount you would be lent) then getting a pre-approval every 2 months doesn't make sense. Do it at a few places at once.

Re: Question about pre-approval process...

Sorry - im new to this! But, the guy at the bank and the real estate agent both said the pre-approval is only good for 60 days...that is why i thought i had to keep re-doing it - b/c it appears some realtors want the actual letter to show you homes.

ETA: really, the only reason we are doing this is just to get the letter to look at homes. we have a lot to put down and are looking in a very comfortable price range so we are not doing it to find out how much we can afford for ourselves but, b/c the realtor asked for it to show the houses.

Message edited 3/19/2010 9:59:10 AM.

Re: Question about pre-approval process...

If you have too many credit inquiries it can absolutely have a negative effect on your credit rating.

Re: Question about pre-approval process...