A regular concern among our South End real estate buyers is the possible connection between credit pulls and lower credit scores. Austin Reed, a South Ender and local mortgage expert, offers some tips on the credit issue for those embarking on a real estate search.
Many believe that every time you get your credit pulled, your score goes down. Consequently, as people begin their home search, they are wary of allowing anyone to look at their credit. This is a common misconception for several reasons.
- First, if there is an adverse effect to your score from credit pulls, it will most likely be 3-8 points that will return within a few months either way.
- Second, it’s not each pull that affects your score, but the total number of credit pulls within the last 12 months.
- Third, a staggering 80% of credit reports have errors on them. By getting a copy of your report early you can address any errors, if they exist, in plenty of time before you begin the loan process.
So what does this mean for you as a borrower? It means that getting your credit pulled as soon as you begin the pre-approval process and your home search is still the smartest thing to do. Not only will this allow your lender to give you an accurate and reliable pre-approval, it will also let you address any errors on your credit report, it will also give you ample time to get them amended.
You might be shocked at how often things appear on your credit report that shouldn’t be there, including cards that aren’t yours or incorrectly written late payments. It’s surprisingly easy to get such items amended, but it does take time (usually 30 days from when you get the documentation from your credit card company).
The big takeaway? Getting your credit pulled early is extremely beneficial to your home search. Don’t shy away from it; embrace it. It can help up your qualifications and, if not, it will be crucial in getting an accurate pre-approval.
As a South End resident with an office in the Back Bay, Austin Reed is an area expert on the intricacies and complexities of the lending environment with respect to condos and high priced homes. With a background in finance, he uses his knowledge of the mortgage industry to get his clients quickly and easily to closing, while being sure to structure their loan to best suit their short and long-term financial goals. Austin can be reached at email@example.com.
Note: Featured image courtesy of 401kcalculator.org.