How to Protect Your Credit Score

• A high credit score helps consumers get a low mortgage rate securing a home loan. A lower score can cost wannabe homeowners a lot in extra charges on a mortgage. Learning how to protect your credit score is more important than ever.

• FICO, the credit reporting agency, has been changing the rules when it comes to credit scores. A score in the 800’s can get borrowers the best mortgage rates. A score in the 600’s can be prohibitive when it comes to obtaining a mortgage.

• Having credit pulled or checked by lenders when you shop for a mortgage is touchy. Credit scores sometimes take a hit when lenders pull credit. Checking credit through a “hard” inquiry can be costly. A hard inquiry requires a lender pulling a full credit report from a credit bureau, which shows lenders your credit standing.

A high credit score gets consumers a lower mortgage. A lower score costs consumers with a more expensive mortgage. Finding out how to protect your credit score is critical to your financial well being.

A soft credit inquiry does not impact credit scores. It’s typically done for informational purposes and not for lending decisions. A mortgage preapproval with only a soft credit check is hard to come by.

When you apply for a mortgage, they’re impossible to get without getting your credit pulled. Credit checks are a standard part of the process to obtain a mortgage. Getting pre-qualified for a mortgage usually includes getting credit pulled. Pre-qualifying for a mortgage is just the initial step in the process.

There are variety of ways to avoid negative impacts on your credit score shopping for a mortgage. Compare offers from multiple mortgage lenders through a mortgage broker and you won’t have to go through the hassles of applying with numerous lenders. If you apply at several lenders to compare rates, it’s advisable to apply at all of them within 45 days. During that time frame all credit inquiries by lenders only show up as one inquiry on your credit report.

That way your credit score won’t drop every time your credit is pulled, having a lower impact on your credit score. It can be particularly important when it comes to a credit score that you’ve been working on to get higher since mortgage rates are all predicated on credit scores.

Getting prequalified first when it comes to checking on a mortgage can be helpful since it doesn’t lower your credit score. In a competitive market, a preapproval is often necessary to prove to homeowners who are selling their home that you’ll be able to get financing if your offer is accepted.

When it comes to getting a mortgage, wait until you officially close on your mortgage before applying for more credit, including new credit cards, personal loans and lines of credit. Getting that new sofa for the front living room in the house you’re buying should be delayed until the home sale closes. Real estate transactions fall out everyday for people who want to buy a new piece of furniture or big screen TV before escrow closes.

Applying for a new credit card may only drop your score a few points, but that few points can sometimes make the difference between qualifying for a mortgage and failing to obtain a mortgage. The difference can also impact the purchaser’s debt levels. It’s important to learn how to protect your credit score to get the best rate on a mortgage. All of this might sound like it’s not very important until it comes to not getting a mortgage.

Loan qualification criteria change often and can be a death blow for a mortgage. Loading up on debt can hurt.

Get a free copy of your credit report from all three major credit reporting agencies or AnnualCreditReport.com.