If you’ll be applying for a mortgage soon, take these extra steps to ensure your credit score doesn’t take a hit through the homebuying process.
• First, avoid establishing any additional credit while applying for a mortgage and for the entire time you’re in the home buying process, until closing. That means no car purchases, appliances, or even in-store credit cards. Use the credit you have and pay it off immediately.
• Second, select one or two mortgage companies who will do a pre-qualification for you. Resist their efforts to have your credit pulled at this point. The details of a pre-qualification are based only on what you tell the lender, so you can see it won’t be official. But the process can give you knowledge for comparing lenders and can help you know if you need to do more financial work before formally applying for a mortgage. Some lenders won’t do a pre-qualification for you without pulling credit. If not, go to the next lender.
• Third, when you’re ready, fill out a formal mortgage application with two or three different companies, including a hard credit pull. If you do this within 45 days of each other, it won’t be counted against your credit report, because mortgage companies expect you to compare. You might want to compare different types of lenders, not simply different companies. There are mortgage brokers, bank lenders, and online mortgage companies. Perhaps select one of each for a full spectrum of variety. Since you only have 45 days in the credit grace period, it pays to have done your homework during your pre-qualification phase. Let me know if you need referrals to lenders.