Just as when applying for a car loan or new credit card, mortgage companies rely on your credit score as a factor in determining whether or not you are approved.

There are three companies who handle this information.  Their web sites are a wealth of knowledge on how to obtain your scores, how to handle bad credit and fix it, how to prevent identity theft and much more.  They are:

Many people are concerned that the prequalification and mortgage processes will negatively affect their credit score.  The answer is yes and no.  If you are serious about purchasing a home, eventually you will have to go through the process.

For more information, below are FAQ's about this concern from the three company web sites.

From Experian: Will I be penalized for shopping around for the best interest rate?
Too many inquiries may have a negative impact on your credit score. However, most recently developed credit scores recognize when a consumer is shopping for the best rates and either ignore multiple inquiries or count them as only one inquiry if they occur within a specific period of time. In such cases, shopping around will have little or no impact on a credit score.
OR click on the link below and scroll to "will I be penalized for shopping around for the best interest rate? "http://www.experian.com/consumer/credit_score_faqs.html 

From Equifax: Will I be penalized for shopping around for the best rate?
Looking for new credit can equate with higher risk, but most credit scores are not affected by multiple inquiries for your credit score from auto or mortgage lenders within a short period of time. The FICOŽ score treats these as a single inquiry, which will have little or no impact on your credit score.

The FICOŽ score ignores all auto- or mortgage-related inquiries that occur within the 30-day period previous to an inquiry from an auto or mortgage lender (called the buffer period). And prior to that buffer period, the scoring software also notes when earlier inquiries were made, if any, and counts back 14 days from each one. The score then counts all auto- or mortgage-related inquires made within any 14-day period as just one inquiry.

For example: John Doe is shopping for a mortgage loan and a lender gets his credit report on November 30. John's credit report also lists three other mortgage inquiries that were made earlier that month. The FICOŽ score ignores those previous mortgage inquiries because they all fell within the 30-day buffer period.

Now let us say that John also purchased a car three months before he began shopping for a mortgage loan. His car shopping resulted in three inquiries from different banks and credit unions over several days. Since they occurred within the same 14-day period, those three inquiries are counted as just one inquiry by the FICOŽ scoring model.
OR click on the link below and scroll to "will I be penalized for shopping around for the best rate?" http://www.equifax.com/cs/Satellite/EFX_Content_C1/1172609771740/5-1/5-1_Layout.htm?packedargs=Locale%3Den_US 

From Trans Union: 
Will I be penalized for shopping around for the best interest rate?
Answer
Most scoring models take the appropriate steps to make sure your score is not lowered because of the multiple inquiries that might occur in a specific time period as a result of shopping for the best terms in an auto or home loan.
OR click on the link below and click on "will I be penalized for shopping around for the best interest rate?"http://transunion.custhelp.com/cgi-bin/transunion.cfg/php/enduser/std_alp.php?p_sid=vFLvA--i&p_lva=&p_sp=&p_li=