If a Lender Pulls My Credit, Will it Lower My Credit Score in Foster City, CA?

Are you pre-approved for your home purchase?

If not, you need to be, and no, it won’t affect your credit rating.  As you search for a new home, you need to be ready to “pull the trigger” when you find just the right one in Foster City, CA .  It’s a myth that having your credit checked for a mortgage loan will lower your credit score.  It won’t if you only do it once or twice.

In today’s real estate market, serious buyers know that the home buying process cannot begin in earnest until they are pre-approved, not pre-qualified for a mortgage. Pre-qualification is based upon “stated” numbers regarding monthly revolving debt, income, and other general information whereas pre-approval is based on verified facts. In the verification process for pre-approval lenders must make inquiries on employment and even check your credit score.

Luckily the Fair Credit Reporting Act recognizes this as a permissible and valid reason for a company to access your credit and it will NOT affect your credit rating or score. Mortgage lenders can run a “soft” credit check, sometimes called a “quotation check” to verify your credit worthiness and pre-approve you for home purchase. It is also interesting to note that multiple lenders can do this (within a 14 day period) without it affecting your credit score, if you want to compare loans. You can also check your own credit report as many times as you would like without causing harm in the same manner. In fact, before meeting with a lender or considering purchasing a home, you should evaluate your credit report and make sure it is error free.

Other types of credit inquiries CAN affect your credit report, so refrain from opening lines of credit at clothing, furnishing stores or car dealerships and other installment retailers until your loan is funded. Credit inquiries account for less than 10% of your overall credit score, but it is still not worth the risk when purchasing a home is in your near future. To keep yourself credit-worthy, make your payments on time, continually strive to increase your income, and make sure the monthly amount accessed on each of your credit cards is less than 30%. These proactive measures will go a long way to helping you secure the loan you need and the home you want.

I’ve written extensively about what not to do when buying a home.  Read about it here.  Here’s what’s currently for sale in Foster City.  Foster City offers top schools and a perfect commute location in San Mateo County.  Let’s talk about why you should move here.  Call us at six five zero, eight six seven, two night zero nine.

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