How many times your credit is checked for a mortgage application (2024)

FAQs

How many times your credit is checked for a mortgage application? ›

Number of times mortgage companies check your credit. Guild may check your credit up to three times during the loan process. Your credit is checked first during pre-approval. Once you give your loan officer consent, credit is pulled at the beginning of the transaction to get pre-qualified for a specific type of loan.

An initial credit inquiry during the pre-approval process. A second pull is less likely, but may occasionally occur while the loan is being processed. A mid-process pull if any discrepancies are found in the report. A final monitoring report may be pulled from the credit bureaus in case new debt has been incurred.

A mortgage lender may well do more than one credit check in the course of your application.

A question many buyers have is whether a lender pulls your credit more than once during the purchase process. The answer is yes. Lenders pull borrowers' credit at the beginning of the approval process, and then again just prior to closing.

And of course, they will require a credit check. I am often asked if we pull credit more than once. The answer is yes. Keep in mind that within a 45-day window, multiple credit checks from mortgage lenders only affects your credit rating as if it were a single pull.

There is a myth that a credit report is pulled several times during the mortgage process but the truth is that it is typically only requested once, depending on the timing of a borrower's transaction. A credit report is pulled at the onset of the mortgage application process.

The typical timeframe is the last six years. Your credit history is one of the many factors that can affect your ability to get approved for a mortgage and a lender can pull up one of your credit reports to see financial information about you, within minutes.

Credit score and mortgages

The minimum credit score needed for most mortgages is typically around 620. However, government-backed mortgages like Federal Housing Administration (FHA) loans typically have lower credit requirements than conventional fixed-rate loans and adjustable-rate mortgages (ARMs).

Some types of mortgages have specific minimum credit score requirements. A conventional loan requires a credit score of at least 620, but it's ideal to have a score of 740 or above, which could allow you to make a lower down payment, get a more attractive interest rate and save on private mortgage insurance.

There's no such thing as “too many” hard credit inquiries, but multiple applications for new credit accounts within a short time frame could point to a risky borrower. Rate shopping for a particular loan, however, may be treated as a single inquiry and have minimal impact on your creditworthiness.

Do underwriters run credit again? ›

Yes, lenders typically run your credit a second time before closing, so it's wise to exercise caution with your credit during escrow.

What happens if your credit score dropped during underwriting? As long as your score meets the minimum credit score requirements for the program you applied for, you won't be denied. However, your interest rate and costs could go up as a result of the lower score, so check with your loan officer if this happens.

Just before releasing the money the lender will re-check your credit file. They will want to see how much you owe, to whom and whether your payments are up to date.

Mortgages can get denied and real estate deals can fall apart — even after the buyer is pre-approved. If you're aware of the pitfalls, you'll reduce the chance it can happen to you!

Number of times mortgage companies check your credit. Guild may check your credit up to three times during the loan process. Your credit is checked first during pre-approval. Once you give your loan officer consent, credit is pulled at the beginning of the transaction to get pre-qualified for a specific type of loan.

The most commonly used FICO Score in the mortgage-lending industry is the FICO Score 5. According to FICO, the majority of lenders pull credit histories from all three major credit reporting agencies as they evaluate mortgage applications. Mortgage lenders may also use FICO Score 2 or FICO Score 4 in their decisions.

Ninety percent of U.S. lenders use FICO scores, but some lenders also use VantageScore models. VantageScore models look at multiple hard inquiries a bit differently. “Any hard inquiries that occur within 14 days of each other are considered one inquiry for scoring purposes,” Ulzheimer says.

Your credit reports are updated when lenders provide new information to the nationwide credit reporting agencies (Equifax, Experian, TransUnion) for your accounts. This usually happens once a month, or at least every 45 days. However, some lenders may update more frequently than this.

If you get preapproved multiple times within a few weeks — which can happen when you're shopping for mortgage rates — only one hard inquiry will count against your credit score. But if your preapprovals are spread out over many months while house hunting, your credit history may take multiple small hits.