Does BRRRR Strategy deteriorate your credit score?

3 Replies

Hi,

I'm just getting started in real estate investing, but I have a question. I have a very good credit score (was 800+ when I checked last time). I'm thinking about doing BRRRR strategy. However, with this strategy, you require your credit to be pulled multiple times to refinance the loan (and for me, I finance my first purchase as well). Wouldn't your credit score deteriorate a lot from getting lots of hard inquiries on your credit, which then will increase your interest rates? How does everyone deal with this situation? Thank you for your help!

I have never heard of a benefit to having a credit score over 740, and credit pulls temporarily drop your credit by just a couple points, so you should be fine.  Also, if you do a bunch of mortgage pulls at the same time it counts as one pull. So you can do a few pulls to get your bridge financing, then do a few more to shop for your refi and it will only count as 2 pulls. This should drop your score by less than 10 points, probably closer to 5.