Do home loan pre-approvals affect your credit score?

Do home loan pre-approvals affect your credit score?

Last updated: 03 April 2019



But there is a little more to it and there are some things you might want to consider…


So, why do home loan pre-approvals impact my credit score?

A pre-approval for a home loan is treated like any other application for credit and these stay on your credit file for 5 years.

The enquiry is recorded on your file regardless of whether the pre-approval was granted or rejected. It details the name of the credit provider, the date of the application, the type of credit product and the amount of credit requested.

If you have a number of credit enquiries on your file over a short period of time it can make you appear less favourable to credit providers. On the flip side however, a home loan application can be seen as a positive contributor to your score.


Why would I want pre-approval for a home loan?

Getting pre-approval means that you effectively have your finances in order before you make an offer or head into an auction. This can make the whole purchasing process much smoother and can put you in a superior negotiating position.

With pre-approval you can also narrow down your search as you know how much you will be able to borrow and your likely LVR (loan to value ratio).

Finally, this can be an invaluable approach in the current climate with the reported tougher lending criteria.


If you’re in the market for a home loan, read more on what you should be aware of in the pre-approval process before you apply!

Remember to check your credit score and credit file information to find out where you stand before you apply!


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