March 7th, 2018 6:58 AM by Jackie A. Graves
The credit check is reported to the credit reporting agencies as
Inquiries tell other creditors that you are thinking of taking
on new debt. An inquiry typically has a small, but negative, impact on your
credit score. Inquiries are a necessary part of applying for a mortgage, so you
can’t avoid them altogether. But it pays to be smart about them. As a general
rule, apply for credit only when you need it. Applying for a credit card, car
loan, or other type of loan also results in an inquiry that can lower your
score, so try to avoid applying for these other types of credit right before
getting a mortgage or during the mortgage process. Learn
more about credit scores.
shop around for a mortgage and it will not hurt your credit.
Within a 45-day window, multiple credit checks from mortgage lenders are
recorded on your credit report as a single inquiry. This is because other
creditors realize that you are only going to buy one home. You can shop around
and get multiple preapprovals and official Loan Estimates. The impact on your
credit is the same no matter how many lenders you consult, as long as the last
credit check is within 45 days of the first credit check. Even if a lender
needs to check your credit after the 45-day window is over, shopping around is
usually still worth it. The impact of an additional inquiry is small, while
shopping around for the best deal can save you a lot of money in the long run.
Note: the 45-day rule applies only to credit checks from mortgage lenders or
brokers – credit card and other inquiries are processed separately.
You can check your own credit with no
impact on your score. When you check your own credit – whether you’re getting a credit
report or a credit
score – it’s handled differently by the credit reporting agencies and does
not affect your credit score. If you are applying for a mortgage and haven’t
your credit report for errors, do so now. You can get a free copy of your
credit report at www.annualcreditreport.com.
If you find any errors, get them corrected as soon as possible.
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