Credit inquiries may reduce credit scores due to the association of inquiries to high risk of default. Borrowers that are distressed may contact many lenders to shop around but may in turn be hurting their scores because of multiple inquiries.
Borrower's can avoid hurting credit scores by keeping the mortgage inquiries to within 15-30 days of the first pull. Because the market changes from day to day, borrower's should not shop over a period of months. It would damage credit scores and put them in higher risk lending situations.
Credit inquiries generally only count for 10% of your total credit score. Multiple inquiries from different places in the same line of work is not as bad as getting multiple inquiries for several different types of loans. Do not expect to shop for a car and a mortgage at the same time, because this could drastically hurt your chances of getting either one. If you were to get two or three different mortgage quotes, in a short period of time, then you should be fine.
Credit inquiries not initiated by the person whose credit report is being pulled do not affect the credit score. Credit card companies often pull a credit report prior to soliciting a qualified person to apply for credit card. These type of credit inquiries have no negative impact on the person's credit profile.
Often times a borrower can get pre qualified for a mortgage and be given a Good Faith Estimate when the borrower provides a consumer copy of their credit report that includes scores from each credit bureau.
Lenders will often ask for a letter of explanation for recent credit inquiries.
There is much misinformation regarding inquiries and how they effect your credit score. Many mortgage loan officers tell applicants not to have their credit pulled again as their score will imediately drop X number of points if they do. This is a technique, of course, for the loan officer to keep the applicant from "shopping" with other lenders. Much of the problem lies in the fact that the credit scoring bureaus do not want to give precise information as to how the scoring works. They withhold this information with good cause because they want the scores to be a true evaluation of risk, not something that can be easily manipulated. This much is known. The scoring system understands that consumers "shop" for credit and should not be penalized for trying to find their best situation. An applicant's credit report can be pulled multiple times during any one 15 day period and for scoring purposes it only counts as one inquiry. Please keep this in mind when looking for a mortgage loan and understand that the lender or broker must see your credit report before they can detirmine what loan program is best for your situation or quote your a rate with any accuracy.
Checking one's own credit does not affect your credit score because it is not considered a credit inquiry.
There are two types of credit inquiries. A "soft" inquiry is one not initiated by the person whose credit is being pulled, and this does not affect your credit score. A "hard" inquiry occurs when a person applies for a loan, credit card, etc., and this does affect your credit score. Too many inquiries in a short span of time can have a negative impact on your credit score.
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Information listed above is to be used for educational purposes only and is not guaranteed