Yes, getting preapproved for a mortgage can impact your credit score, but the effect is usually minimal and temporary. The impact depends on the type of credit inquiry made during the preapproval process. Here’s what you need to know to understand how preapproval affects your credit score and how to minimize any potential drawbacks.

1. Hard Credit Inquiry

When you apply for preapproval, most lenders perform a hard credit inquiry to evaluate your creditworthiness. A hard inquiry temporarily lowers your credit score by a few points, as it indicates you’re actively seeking credit.

2. Soft Credit Inquiry

Some lenders or prequalification processes use soft credit inquiries, which do not affect your credit score. However, soft inquiries are typically less detailed and may not result in a formal preapproval.

A hard credit inquiry typically reduces your credit score by 5 points or less. For borrowers with strong credit, the impact is often negligible. However, if you have a limited or weak credit history, the effect may be slightly more noticeable.

The impact of a hard inquiry is temporary, usually lasting 12 months, and its significance decreases over time.

Lenders need to access your full credit report to evaluate your:

• Payment history: A record of on-time and late payments.

• Credit utilization: The percentage of your available credit that you’re using.

• Credit mix: The variety of credit accounts (e.g., credit cards, loans).

• Debt-to-income ratio (DTI): How your debts compare to your income.

This detailed analysis helps lenders determine your eligibility and offer accurate loan terms.

1. Time Your Inquiries Strategically

Credit scoring models like FICO and VantageScore treat multiple mortgage inquiries within a 14–45 day period as a single inquiry. This allows you to shop for lenders without significantly affecting your credit score.

2. Check Your Credit First

Pull your own credit report before applying for preapproval. Reviewing your credit yourself is a soft inquiry and won’t impact your score. It also helps you identify and address any issues in advance.

3. Limit Other Credit Applications

Avoid applying for new credit cards, auto loans, or other types of credit during the preapproval process, as additional hard inquiries can compound the impact on your score.

While the act of getting preapproved doesn’t directly improve your credit score, successfully managing a mortgage loan after approval can. A well-managed mortgage with on-time payments and reduced debt can boost your credit over time.

• Temporary Dip in Credit Score: Expect a minor decrease immediately after the hard inquiry.

• Quick Recovery: Your score should recover within a few months, especially if you continue good credit habits.

• No Long-Term Effects: The hard inquiry will fall off your credit report after two years and has no lasting impact.

Getting preapproved for a mortgage may slightly lower your credit score due to the hard inquiry, but the impact is typically small and temporary. The benefits of preapproval—such as knowing your borrowing capacity, strengthening your offer, and being prepared for the homebuying process—far outweigh the minor effect on your score.

By timing your inquiries carefully and maintaining strong financial habits, you can minimize the impact and focus on your goal of homeownership with confidence.