What happens when credit is checked
A lender's hard credit check is reported as an inquiry and typically has a small negative effect on credit scores. The exact change cannot be predicted because scoring models and credit files differ.
A soft inquiry generally does not affect a score. Ask whether a particular review uses a soft inquiry, a hard inquiry or only self-reported information.
Mortgage comparison shopping
Credit-scoring models generally recognize that consumers may compare mortgage lenders. The CFPB explains that inquiries for the same type of loan made within a 14-to-45-day period are generally treated as no more than a single inquiry, although the applicable window varies by scoring model.
Keep lender comparisons focused in time and avoid applying for unrelated credit while preparing for a mortgage.
Why the review still matters
Credit affects more than whether a loan is available. It can influence pricing, mortgage insurance, program fit and which issues should be addressed before an offer.
The small potential effect of an inquiry should be weighed against the risk of entering a purchase contract without a meaningful review of the information a lender will use.
Questions to ask before authorizing it
Ask what type of inquiry will be used, which credit-reporting information will be reviewed, how long the preapproval is intended to remain useful and whether another credit review may occur before closing.
Continue monitoring accounts and make every payment on time. Do not open, close or increase debt without discussing the timing with the mortgage professional handling the application.