Posted: Tue Feb 13, 2007 9:24 pm Post subject: Would credit check affect credit score?
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I am shopping around for 30 Yr fixed rate mortgage. One loan officer advised me not to do so because running credit check will reduce my credit score, is that true?
Experts suggest that it is better to avoid too many inquiries and credit checks within a short time because it gives the impression that you may be applying for multiple accounts and this may affect your score. _________________ Procrastination is the enemy of your financial success
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Posted: Wed Feb 14, 2007 9:31 am Post subject: Would credit check affect credit score?
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Would two inquiries per month affect my credit score? I might meet with loan officers from different lenders and I am sure they would want to run a credit check to get me pre-approved.
If you consider that FICO scoring is the predominant scoring system for mortgage lending and that myFICO.com's own website explains that once your credit is pulled by a mortgage lender subsequent inquiries by other mortgage lenders in a 30 day period will have no impact on your score. Here is the text from their FAQ:
Quote:
What to know about "rate shopping."
Looking for a mortgage or an auto loan may cause multiple lenders to request your credit report, even though youre only looking for one loan. To compensate for this, the score ignores all mortgage and auto inquiries made in the 30 days prior to scoring. So if you find a loan within 30 days, the inquiries won't affect your score while you're rate shopping. In addition, the score looks on your credit report for auto or mortgage inquiries older than 30 days. If it finds some, it counts all those inquiries that fall in a typical shopping period as just one inquiry when determining your score. For FICO scores calculated from older versions of the scoring formula, this shopping period is any 14 day span. For FICO scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span. Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO score.
Source: myfico.com
So the lender that told you that was either too new to know the truth, too inexperienced to even do a google search to give you an accurate answer, or trying to SCARE you into taking his deal without shopping around.
buyer beware.
[Edited by Caron as per forum guidelines.] _________________ Creating brand identity, awareness and development for real estate and financial professionals.
it's alarming to recognize how few peope in this industry are unaware of how inquiries make an impact. in my office alone the other day, there was a client asking of my coworkers if his score would be hurt by shopping around with other morttgage lenders. her answer was that it would not be hurt "because all those inquiries within a month or so" would be fine. an underwriter overheard this and piped in with this: "mortgage inquiries have no effect on your score at all."
i handed the man a printout my myfico.com that explains precisely what ken noted above.
i guess the scariest part is that i work with these people. i have to make sure i educate my own customers myself and warn them to not listen to others who think they know. _________________ George M. Akerley
Independent Contractor - Mortgage Consultant
Word of Excellence Editing/Writing/Proofreading
860-221-5044
Mortgage Forums 
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