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How Many Points Does a Credit Inquiry Drop My Credit Score?

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Recently, I have had a handful of myths to unpack with current/future clients. This will inevitably make their buying journey more stressful. I mean, come on! Who likes to learn that what you thought and what your trusted friends/family/coworkers thought isn’t the case? No one! It feels like having your world rocked a bit. So, truly…. How many points does a credit inquiry drop my credit score?

💥 Myth Busting Time 💥

I want to educate with kindness and prevent anyone else from feeling these same pain points so I’m going to touch on two pre-approval myths so read on!

Myth 1: Running my credit to complete my pre-approval will tank my score!

Fact: Your FICO score is basically the most common credit score used when figuring out your pre-approval and yet even FICO is stating that your score will likely be effected 5 points of less. Furthermore, with on time payments, it should recover in a couple months. Sounds worth it to me!

Myth 2: A pre-approval isn’t super important when starting my home search if there are no (or few) homes on the market that I am interested in.

Fact: While you ~might~ have time to go see a home that catches your eyes before you decide you want to offer, and ~might~ get pre-approved for that price point or higher, and ~might~ be able to make an offer before someone else does… that’s a lot of ~mights~ and increases the risk that 1. you won’t be able to get pre-approved for that price point 2. You have been looking in the wrong price point 3. Will get emotionally attached to a home and experience the crippling feeling of loss.

If you’re still asking why lenders and more importantly, Realtors are encouraging you to get pre-approved, our most important motive is for a better buying experience for you, the buyer. Imagine going to buy a laptop and they don’t have prices on them. You mess around with all of them, check out the specs, and finally found “the one.” You take it to the check out counter and the customer service rep tells you how much it will be (you can’t afford it). Had you known what you could afford, you wouldn’t have looked at the nicer laptops and gotten your heart and mind set on those specs. Now? Your heart sinks and the perfectly good laptop you can afford seems inferior.

If you’d like to learn more about the buying process, please feel free to follow me on Instagram and/or Facebook, enjoy some helpful buyer videos and articles below, and more importantly, reach out so we can schedule a time to go for a walk/snag a coffee/spend some time face to face to talk through your hopes, fears, questions, and put more information into your world. Talk soon!

Home Buyer Tips Video Playlist

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