I’m Mortgage Rate Shopping — Will My Credit Score Go Down?

Young man is signing financial mortgage contract of sale for a new house with real estate agent at office.
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Even the smallest difference in your interest rate can save you money over time, so it pays to shop around for competitive mortgage rates from different lenders.

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However, each lender will do a “hard credit check” when you submit your application. A hard inquiry can temporarily hurt your credit score by a few points. But the good news, according to Credit Karma, is that having a rate-shopping strategy will not only help you save over the long run, but potentially avoid having multiple hard inquiries on your credit report.

When you’re shopping for a mortgage, hard inquiries are usually counted as one inquiry over a given period of time. This may vary depending on the credit scoring model used, but Equifax says that it’s typically from 14 to 45 days. While all inquiries will appear on your credit report, only one will impact your score.

Even if a lender checks your credit report outside of this mortgage credit check window, shopping around is usually still worth it, Consumer Finance reported. The overall impact of an additional inquiry is small compared to the amount of money you could potentially save over time.

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Credit Karma also noted that if you plan to take out a mortgage soon, avoid applying for other types of loans at the same time. These will show up on your credit report as separate inquiries, even if you apply with the same time frame. This could affect the interest rate you qualify for or even your ability to get preapproved for a mortgage.

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About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.

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