Granting a lender permission to pull your scores constitutes what’s known as a “hard inquiry.” which can ding your credit. But if there is a hit, it’s typically just a handful of points. Hard inquiries on your credit can be a troublesome sign. But the major credit bureaus also see the value of comparison shopping – and that’s why they cut homebuyers some slack.
Credit bureaus have come to expect rate shopping. Rather than count every mortgage credit pull against you, most scoring formulas treat all of these hard inquiries within a certain time period as one, big credit pull. The time frame varies depending on the scoring firm. For example, the newest FICO scoring models consider all inquiries within a 45-day window as a single hard credit pull. The older versions of the FICO scores work off of a 14-day span, so ask the lender what scoring model they’ll be using.
That gives consumers a solid period of time to work toward pre-approval among multiple lenders. You’ll get a good look at their rates, terms and estimated closing costs without worrying about your credit score taking a nosedive.