Does Rocket Mortgage Affect Credit?

Getting approval for a mortgage can’t happen without your credit score. But what happens to your credit score the moment the lender decides to check it, and does Rocket Mortgage affect credit as well? This and many other answers are waiting for you, so keep reading.

Does Rocket Mortgage affect credit? Rocket Mortgage does affect your credit. Like with any other mortgage application, it may cause a slight decrease in your credit score. It is because the lender will have to check your credit score, which will set in motion an inquiry that will lower your credit by a few points.

Man and woman looking at their financials

When you shop for mortgages, your credit score will be something every lender will want to see. Still, there are ways you can do it without hurting your credit score that much. Here is what you need to know

How Does Mortgage Pre-Approval Work?

First, let’s start with how the whole pre-approval process works, how long does a mortgage application take, and when you should apply for mortgages. When shopping for a mortgage, whether you are doing this alone or with a mortgage broker, you will have to send copies of your most important financial documents.

These usually include the last two months of bank statements. Once you send this paper, a mortgage lender will send you a letter with information about how much money he can borrow you. Here is how the whole process typically goes step by step:

Step 1Pre-approvalReview of your financial situation
Step 2House huntingBuyer finds a house and sign an agreement with a seller
Step 3Loan ApplicationBorrower finishes loan application with the information about the house he would like to buy.
Step 4Mortgage processingLender gathers all the information and makes a file
Step 5UnderwritingUnderwriter analyzes the file and determines whether you are getting a loan
Step 6Approval and closingUnderwriter issues final approval and loan is closed

Does Pre-Approval Request Affect My Credit Score?

As you know, all lenders use FICO to check your credit score when you apply for a mortgage. Your credit score is your credit history, and it allows the lender to see if you are paying your debts on time. The credit bureaus will update your credit score every 30-45 days.

But once a lender asks for your credit score, it will be lowered. If you apply for a mortgage, the FICO will consider this to be a hard inquiry. Still, you will have a 45 days window to shop around with different lenders, and the FICO will consider this the same inquiry.

So if you apply for a mortgage within 14 days, your score will get lower but only shortly. Afterward, it should get higher.

Balance sheet under a magnifier

Does Rocket Mortgage Affect Credit? Yes, but It’s Like With Any Other Lender

Even though Rocket Mortgage provides easy applications, for loans as big as it is a mortgage, it will require some credit score check-up and hard inquiry. So even if you refinance at Rocket Mortgage, your credit score will be affected.

But with a 45 days window and easy application, this slight drop shouldn’t affect your search for the best lender and loan.

Man looking at papers

How to Avoid Lowering Your Credit Score When Searching for Best Loan

First thing you can do is to shop in a short time frame. If possible, before you send any requests to potential lenders, get to know what they offer and the terms and conditions.

Narrow down your choice, and then start applying. You will have 45 days to submit the same credit score that is, under the FICO, considered to be one hard inquiry. Here are the types of inquiries you can have:

  • Hard Inquiries – will affect your score,
  • Soft Inquiries – won’t affect your credit scores.

Check Your Credit Score at the Right Time – Only Have One Hard Inquiry

Pre-approval will save you a lot of time when hunting for a loan. With it, you will know if this lender is giving you a good deal. Also, keep in mind that pre-approval is not the same thing as prequalification.

Pre-qualification only gives you an idea of what you may loan (qualify for) while pre-approval requires more information for your lender, such as credit score. So if you are not sure you will go with that lender, do not ask for pre-approval because you will lower your credit score and open a 45 days window.

Do Not Apply for Any Credits for Some Time Until You Find a Perfect Home

As you can see, this process is truly complicated, and you need to act fast. So make sure you don’t do anything that can lower your score unnecessarily. Refrain from any new credit applications, and you will be just fine.

Start your preparations on time, so once you find a perfect house, you can start the whole process immediately.

Brown and gray single family house

When Applying for a Mortgage Find Efficient and Fast Lender

A truly important part of a mortgage application is how fast your lender will give you some initial quotes. So before you ask to be pre-approved, make sure you go to a reliable lender that will not drag this process and leave you without any loan and with a lower credit score.

Also, never leave anything to chance. Make sure you have plans B, C, and D. Apply to as many lenders as you can. This way, you will get most of the whole process and probably a better deal.

If a lender sees that you know your way around the loans, they will respect you more and make sure you become their customer.