Does Getting Preapproved for a Home Loan Hurt Your Credit Score?

Does Getting Preapproved for a Home Loan Hurt Your Credit Score? When you embark on the journey to purchase a home, one of the early steps is getting preapproved for a home loan.

Does Getting Preapproved for a Home Loan Hurt Your Credit Score?
Does Getting Preapproved for a Home Loan Hurt Your Credit Score?

This crucial process helps you understand how much home you can afford and demonstrates to sellers that you’re a serious and financially capable buyer. However, many potential homebuyers have concerns about the impact of getting preapproved for a home loan on their credit score.

In this article, we will delve into the intricacies of this issue and shed light on whether the preapproval process hurts your credit score.

Does Getting Preapproved for a Home Loan Hurt Your Credit Score?

Getting pre-approved for a home loan typically results in a temporary and minimal impact on your credit score. When you apply for preapproval, the lender will perform a “hard inquiry” on your credit report, which can cause a slight dip in your credit score. However, the decrease is generally small, and it is a normal part of the mortgage application process.

Here’s what you need to know about credit inquiries when getting preapproved for a home loan:

Understanding the Preapproval Process

Before we dive into the credit score aspect, let’s take a moment to understand what getting preapproved for a home loan entails. When you apply for preapproval, you essentially request a lender to evaluate your financial background and creditworthiness. The lender will review your credit history, income, and other financial information to determine the maximum loan amount you qualify for. This process involves a credit inquiry, which can be either a soft or hard inquiry.

Soft vs. Hard Credit Inquiry

Credit inquiries come in two forms: soft and hard. A soft inquiry, typically conducted by entities like credit card companies or employers, doesn’t affect your credit score. It’s essentially a quick and harmless check that doesn’t show up on your credit report. A hard inquiry, on the other hand, is a more comprehensive review of your credit report and is initiated when you apply for credit, such as a home loan. A hard inquiry may cause a temporary dip in your credit score.

The Impact on Your Credit Score

Now, the pivotal question: does a hard credit inquiry associated with the preapproval process hurt your credit score? The answer is, yes, it can have a modest impact, but it’s essential to put this into perspective. A single hard inquiry generally leads to a minimal and short-term decrease in your credit score. The actual impact may vary depending on your overall credit history and financial situation. For individuals with a strong credit history, the drop is often barely noticeable.

The Extent of Credit Score Impact

The extent of the impact on your credit score should not deter you from seeking preapproval. The credit score reduction due to a hard inquiry typically ranges from 5 to 10 points, and this decrease tends to be temporary. Over time, your score is likely to recover as you continue to manage your credit responsibly.

It’s also important to remember that other factors contribute more significantly to your credit score. Payment history, credit utilization, and the length of your credit history are among the major components. A temporary dip caused by a hard inquiry is usually outweighed by these more substantial factors.

Minimizing the Impact on Your Credit Score

If you’re concerned about the potential impact of a hard inquiry on your credit score, there are steps you can take to minimize it. For instance, you can limit the number of lenders you approach for preapproval. Multiple hard inquiries in a short period can collectively have a more significant impact on your score.

Furthermore, you can work with a mortgage broker. A mortgage broker can help you find the most suitable lenders for your financial situation. And may reduce the number of inquiries. They typically have relationships with multiple lenders and can submit your application to those who are most likely to approve it.

The Benefits of Preapproval

Despite the slight and temporary impact on your credit score, the benefits of getting preapproved for a home loan far outweigh any concerns. Preapproval not only provides you with a clear understanding of your budget but also strengthens your position in the competitive real estate market. Sellers are often more willing to negotiate with preapproved buyers because they represent lower risk and are more likely to close the deal.

In addition to this, preapproval can expedite the closing process, as much of the legwork has already been done. This can be especially valuable in a fast-moving real estate market where every advantage counts.


In conclusion, getting preapproved for a home loan may result in a slight and temporary decrease in your credit score due to a hard inquiry. The benefits of preapproval significantly outweigh this concern. The impact on your credit score is minor, and it should not dissuade you from taking this important step in your home-buying journey. By managing your credit responsibly and taking the necessary steps to minimize the impact. You can confidently pursue your dream of homeownership with the knowledge that preapproval enhances your position and streamlines the process.


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