by Aidan Kang, CFA
Senior Writer
UPDATED: July 27, 2021

If you’re planning to buy a house, mortgage rate shopping is an important part of the process. Many people, however, get carried away only to realize that mindlessly shopping for a mortgage is affecting their credit score. This can be counterproductive because as you may already know by now, your credit score plays a big role in the mortgage rate that you’re going to get. If your credit score is not that good, having a few points shaved off could affect your ability to get a better deal.

So, how do you shop for a mortgage without damaging your credit score? What can you do to keep your credit score unaffected? In this article, we will discuss how mortgage rate shopping could affect your credit score and provide you with some practical tips on how you can maintain your credit score while looking for the best mortgage rates.

How Does Mortgage Rate Shopping Affect My Credit Score?

“Will rate shopping hurt my credit score?” This is a common question often asked by people who are planning on buying a house, a car, or getting a personal loan. While it is a natural part of the process to find the best deal available to you, what you might not know is that if you don’t follow some best practices, mortgage rate shopping could subtract a few points from your credit score.

When you are mortgage rate shopping, lenders have to perform a hard credit check also known as a hard inquiry on your credit report. This is done to determine how much you can borrow and the mortgage rate you can get. Typically, the higher your credit score, the better deal you’ll be offered.

Do hard inquiries impact your credit score? The answer is yes. According to FICO, a hard inquiry will decrease your credit score by 5 points or less depending on how strong your credit history is. However, not every single hard inquiry will minus 5 points from your score. There is a “mortgage credit pull window” of 14 to 45 days where all similar inquiries done in that timeframe will be considered as a single inquiry. If you make inquiries outside of that window, this could affect your credit score separately.

Tips On How To Shop For A Mortgage Without Hurting Your Credit Score

If you have a pretty good score, you shouldn’t really be too worried about mortgage rate shopping because new credit inquiries only amount to 10% of how your overall credit score is calculated. However, if your score is already borderline bad, it is understandable for you to be conscious of every single thing that could decrease your score.

For example, if your score is only at around 620, even a small deduction in your credit score could disqualify you from getting a conventional loan which usually requires a score of 620 to 640. The good news is that there are some things that you can do so you can go shop for mortgage rates without hurting your score that much.

Step 1: Request For A Free Credit Report

Don’t go mortgage rate shopping without having an idea of what your own credit score is. It is better to have an idea first hand of your credit status by requesting a free credit report. Knowing your own credit score can help you when researching lenders, getting estimates, or getting pre-qualified.

Don’t worry because you don’t even need to spend money to get this information. By law, you are entitled to one free credit report from the three major credit reporting bureaus. You can request your credit report by visiting

After getting your credit report, check it thoroughly in case there are errors. A study from the Federal Trade Commission found that one in five people have an error in at least one of their credit reports. These errors could result in less favorable terms when you’re trying to secure a loan. If you find that there is an error in your credit report, you can dispute this and could help raise your score.

Step 2: Manage Your Finances To Maintain Or Increase Your Credit Score

If you are already planning on getting a mortgage in the near future, it is important to be diligent about how you manage your financial transactions. While mortgage rate shopping can impact your credit score, remember that it’s only 10% of how your score is calculated. What hurts your credit more is irresponsible borrowing and your payment activity leading to getting a mortgage.

Many people are not aware that 65% of your credit score is based on your payment history and your credit utilization. What does this mean? When you want to apply for a mortgage, try to avoid taking on new debts. Don’t buy a new car, take a personal loan, or max out your credit card if you want to buy a house soon. 

If you have existing loans or credit, avoid late payments.  If you can afford to pay off your credit cards, you should. The fewer debts you have, the better. Strengthening your credit score for 3 to 6 months before getting a mortgage could save you a lot of money when it comes to getting a better deal in mortgage rates.

Step 3: Research And Shortlist Lenders

When you want to buy something that costs a lot of money like your own house, it’s perfectly natural to want to get the best deal out there. You want to make sure that you’re not leaving any stone unturned so you end up asking every lender you can find on what rates they could offer you. This, however, can be very time consuming and not a smart way to shop for mortgage rates.

With the internet, it is already possible to find available lenders with the rates that they’re offering. There are online mortgage calculators that will give you an idea of what rates lenders are offering based on your location, credit score, and loan term.

Researching about these lenders beforehand can help you come up with a shortlist of your ideal lenders. By having a shortlist, you can make your mortgage shopping more focused. For example, if you find lenders on the internet, don’t immediately call them and let them run a hard credit check on your credit report. Instead, list down the best lenders based on your research. At this stage, you can list down your top 10 lenders, ranking them from the most to least ideal based on your research. When your list is ready, you can move on to the next step, which is pre-qualification.

Step 4: Get Mortgage Pre-Qualification

Many people are confused between mortgage pre-qualification and pre-approval. These two things are often interchanged but in fact, these are two different processes. A mortgage pre-qualification is usually a quick and free process. During pre-qualification, you can determine whether you are qualified for a mortgage without a credit check and you also get a rough idea about how much money you can borrow. At this point, you will not really know the exact mortgage rates you’ll get because the checking is not in-depth, but it could help you see which lenders will qualify you for a loan.

As mentioned, there will be no credit checks because usually, lenders will only base their decision either on the information you provide them or by running a soft credit check which does not hurt your credit score. This is the reason why you need to request your credit report so you can give your credit score to the lenders during pre-qualification. If you are not sure whether a lender will run a hard credit check or not, you have to ask this to clarify. You don't want them running a hard inquiry without you knowing. 

More importantly, a pre-qualification will also tell you how much you can afford when buying a house. Usually, when you are looking around for your ideal house, your realtor will ask you for your budget. By being pre-qualified, you will be able to give this estimate to your realtor without going through a hard credit inquiry. Knowing how much money you can borrow will save you a lot of time so that you’ll not look for houses you cannot afford.

Step 5: Prepare All Your Mortgage Pre-Approval Requirements

After going through the pre-qualification process, the next step is getting pre-approved. But before you start doing that, what you first need to do is to get all your documents ready. Approach your top mortgage lenders and ask them about the list of requirements for mortgage pre-approval. These documents can include your pay stubs, bank statements, tax returns, etc.

Make sure that you have these docs ready before applying to any lender. Why do you need to do this? Remember that you only have 14 to 45 days for mortgage shopping for you not to hurt your credit score. By having your documents ready, this saves you time when applying to multiple lenders within this period.

Step 6: Get Mortgage Pre-Approval Within A 14-Day Window

During pre-approval, lenders will need to run a hard credit check. If you followed the process mentioned earlier, you should already have your top 3 to 5 lenders in mind at this point, which are the lenders that have already prequalified you or those that you prefer to deal with. With your requirements ready,  it should not really take you a lot of time to go through the pre-approval process.  Approach your top 3 to 5 lenders first and compare the rates that they are offering you. Some lenders will offer to lock the rate so you can get the same rate when you are getting the loan approval.

Maybe you’re wondering why we’re advising that you narrow down your list of preferred lenders. How many times can you pull credit for a mortgage? Is there a limit?  The answer is no. You can ask for mortgage quotes or pre-approval from multiple lenders to find the best deal but there’s a catch. As mentioned earlier, you have to do it within the mortgage credit pull window of either 14 or 45 days. Why is it different? Older FICO scoring models use a 14-day window while the newest versions of the scoring formula use a 45-day window.

If you have an excellent credit score, it might not be a big deal to work with the 45-day window, but if your credit score is precariously low already, sticking to the 14-day window is the safer route. If you already have a shortlist of lenders, you have a better chance of not going over this two-week window.

If you are not satisfied with the offers the lenders gave you, you can approach other lenders and get additional quotes but do it within the two week period. Make sure you don’t schedule your rate shopping when you’re super busy at work or you know that you have a lot of personal tasks during that week.

Mortgage Rate Shopping Without Hurting Your Credit Score

Shopping for a mortgage should help you find a better deal and not hurt your credit score. By following the recommended tips above, you can smartly shop for mortgage rates without damaging your credit.