Mortgage/Credit question
Hopefully I will be buying a home sometime this year. I am told that
it's best to shop around. I'm also told that everytime someone gets
pre-qualified/approved their credit is checked(of course) thus
lowering thier credit score. I heard about a case a while back where
the person checked with so many banks etc. that it dropped his score
almost 100 points!! This is probably an extreme case but It could
happen How can something like this be avoided? Any help is
appreciated
I've never heard of this myself. A pre-qual should not effect your score.
Its what you owe or could owe that affects your score. Now I suppose if you
get approved and then accept the loans but never fund it would reduce your
score. But you have to have signed on for the credit.
By the way when you need an agent to work with drop me a line and I'll
recommend a super one in your area.
A pre-qualification will not effect your score...because this is simply a
conversation with a loan officer about your income, debt etc. They do not
pull your credit report during the pre-qual process.
A pre-approval on the other hand, will pull your credit report. During the
homebuying process, lenders understand that you will shop around, so they
will make allowances for that. But I don't see why you should have your
credit pulled by more than one lender. The first step in this process is to
get your own credit reports and be sure they are accurate. Here is GA,
residents are allowed to have 2 free copies of their credit report each
year. Even if you have to pay for yours (nominal fee mostly), it is money
well spent...and will save headaches later. There are places that will give
you your FICO score free and you can use that in your "shopping around"
conversations.
When you do shop around, be sure to receive a written "Good Faith Estimate"
to be sure you are comparing apples to apples. Remember, the analysis of a
good loan is more than just the rate.