Do Mortgage Credit Inquiries Drop My Scores? How Many Points Will I Lose When They Pull Credit?

Guest post by Sam Parker at MyCreditGuy

Table of Contents

• Key Takeaways
• Why Does the Lender Need to Pull Your Credit?
• Addressing Concerns About What the Credit Report Shows
• How Much Does a Hard Inquiry Affect Your Credit Score?
• The 45-Day Window for Mortgage Credit Inquiries
• Risk vs. Reward: Why Letting the Lender Pull Your Credit Is Worth It
• What Happens If There Are Credit Issues?
• Frequently Asked Questions (FAQ)
• Final Thoughts

Key Takeaways

• Your lender must pull your credit report to determine if you qualify for a mortgage, and this is a standard part of the process.
• Hard inquiries typically reduce your credit score by only 0 to 3 points—far less than the exaggerated fears of 40-point drops.
• Mortgage lenders have a 45-day window to pull multiple credit reports without negatively impacting your credit score.
• It is better to address any credit issues early rather than delay the credit pull out of fear.
• If your credit has deeper issues, professional consultation is available to help you navigate and improve your credit profile.

When you’re applying for a mortgage, one of the biggest concerns people have is how the lender’s credit inquiry will affect their credit score. It’s natural to worry that the lender pulling your credit report might lower your score enough to jeopardize your loan approval. But let me put your mind at ease—this fear is often blown out of proportion. In this article, I’ll walk you through why your lender needs to pull your credit, how much that inquiry will likely impact your score, and why it’s actually beneficial to let them do it sooner rather than later.

Why Does the Lender Need to Pull Your Credit?

When you’re trying to access a significant amount of money—often hundreds of thousands of dollars—the bank or mortgage lender needs to know if you’re a good risk. This means they need to see a fresh, up-to-date credit report. Without it, they can’t accurately assess your creditworthiness or make an informed lending decision.

Think of it this way: it’s like applying for any large loan or financing. The lender wants to verify your financial habits, outstanding debts, and payment history to ensure you can responsibly repay the mortgage. This step is mandatory and unavoidable if you want to move forward with your home purchase or refinance.

Addressing Concerns About What the Credit Report Shows

If you’re worried about what the lender will see on your credit report, keep in mind that the report will come up sooner or later anyway. Hiding from the inquiry doesn’t make any negative items on your credit report disappear. In fact, the sooner you deal with any credit challenges, the better your chances of resolving them and improving your score.

Delaying the credit pull won’t protect you; it just prolongs uncertainty and potentially stalls your mortgage application. The best approach is transparency and proactive management of your credit.

How Much Does a Hard Inquiry Affect Your Credit Score?

One of the biggest myths is that a single hard inquiry can tank your credit score by a huge margin, like 40 points or more. This simply isn’t true. Most hard inquiries cause a drop of anywhere between zero and three points—usually very low single digits.

Why such a small impact? Because credit scoring models understand that when you’re shopping for a mortgage, you might be applying to multiple lenders to find the best rate. They don’t penalize you heavily for this behavior since it’s considered responsible shopping.

The 45-Day Window for Mortgage Credit Inquiries

Here’s a crucial detail that many people don’t know: the mortgage industry has a built-in grace period for credit inquiries. You have a 45-day window from the date your credit was last pulled during which multiple inquiries for the same type of loan (like a mortgage) will count as a single inquiry. This means you can shop around with different lenders in that time frame without any additional negative impact on your credit score.

This policy encourages you to find the best mortgage deal without fearing that each lender’s credit pull will damage your score. It’s a win-win situation that benefits both borrowers and lenders.

Risk vs. Reward: Why Letting the Lender Pull Your Credit Is Worth It

When you weigh the small risk of a minor credit score drop against the reward of securing a mortgage loan, the reward clearly outweighs the risk. Without the lender pulling your credit, your mortgage application cannot move forward. The process is necessary and standard practice.

So don’t let fear of a few points dropping stop you from getting your credit pulled. It’s a small price to pay for the opportunity to secure financing on your home. And remember, if your credit report reveals issues beyond what you can handle alone, professional help is available.

What Happens If There Are Credit Issues?

If your credit report shows problems that might impact your mortgage approval, lenders usually refer you to credit repair specialists or consultants who can help you improve your credit profile. For example, if you have outstanding debts, late payments, or errors on your report, these issues can often be addressed and corrected.

Getting a free consultation with a credit expert can provide guidance and a customized plan to boost your credit score and increase your chances of mortgage approval.

Frequently Asked Questions (FAQ)

Will a credit inquiry from a mortgage lender ruin my credit score?

No. A hard inquiry from a mortgage lender typically lowers your credit score by only 0 to 3 points, which is very minimal and unlikely to affect your mortgage approval.

Can multiple mortgage inquiries within a short time hurt my credit?

Mortgage inquiries made within a 45-day window count as a single inquiry, so shopping around for the best mortgage rate won’t significantly impact your credit score.

Should I wait to let lenders pull my credit if I’m worried about my score?

It’s better to let lenders pull your credit early so you can understand your credit standing and address any issues before they become bigger problems.

What if my credit report shows issues? Can I still get a mortgage?

Many credit issues can be resolved with time and professional help. If problems arise, getting a free consultation with a credit expert can help you develop a plan to improve your credit and qualify for a mortgage.

Are there any hard inquiries that can cause a large drop in my credit score?

No. Inquiries generally cause only a small, temporary decrease in your credit score. There is no such thing as a credit inquiry that causes a 40-point drop.

Final Thoughts

Understanding how mortgage credit inquiries affect your credit score is essential to navigating the homebuying process confidently. The credit pull your lender needs to make is a normal, necessary step that won’t cause a dramatic drop in your credit score. In fact, the impact is minimal—usually just a few points—and multiple inquiries within a 45-day period are treated as one.

Don’t let fear of a credit inquiry hold you back from pursuing your dream home. The sooner you let your lender pull your credit, the sooner you can address any concerns and move forward with your mortgage journey. If you encounter any challenges, professional credit help is available to guide you through.

Remember, the reward of securing a mortgage far outweighs the small risk of a minor credit score drop. So, take that step confidently and let your lender pull your credit.