If you are in the market to purchase a new home and filling out a 2022 Mortgage Application, you might be wondering if you have to go from lender to lender in order to get a loan that your credit will be hit each and every time you apply somewhere. Well the good news is that you are mistaken in this regard. In the following paragraphs I will walk you through what happens when you are applying for a mortgage and you are having your credit pulled.
As with all other loans, the 2022 Mortgage Application isn’t much different in that your credit will be pulled and checked in order to determine creditworthiness. Pulling your credit is one of the only ways a lender can see into your credit history so they can determine if you are worthy of a loan or not. If you are applying for a lot of different forms of credit at the same time, then yes, you will be hurt by all the inquiries into your account. For example, if you are somehow looking for a car loan, credit cards, and a mortgage, you will do significant damage to your credit score by inquiries. However, if you are just looking for a mortgage and you’re just filling out the 2022 Mortgage Application, you can save significant damage to your credit by following a few steps.
According to most credit scoring models, they will group credit inquiries that were made for a specific type of credit (in this case the 2022 Mortgage Application) and completed in a certain timeframe to only affect your credit score once. This is one place where if the credit agencies see that you are shopping around for lenders, they are lenient in knowing that your credit must be pulled to show credit worthiness. It can vary amongst the three credit bureaus (TransUnion, Experian, Equifax) but the average timeframe is 20-45 days or so. Don’t be too concerned with your credit score because an inquiry against your 2022 Mortgage Application will only cost you 5 points or so.
Just remember that there are lot of different credit requirements out there for all the different types of loan programs and make sure you read my article on 2022 Credit Scores before filling out your 2022 Mortgage Application. Also, since all 3 bureaus don’t report credit at exactly the same time, your scores will vary between the bureaus by as much as 100 points. This is all due to the fact that the bureaus have their own way of calculating their score so no 2 bureaus will give you the same score most of the time. This is why mortgage lenders use the middle credit score of the 3. Is this a perfect way to do it? Probably not, but there has to be some reasoning behind the score they choose.
Finally, the only time you should worry about losing those few points in your credit score is when you are at or near the minimum requirements for a loan. For example, you are looking for an FHA loan and have a 585 credit score, dropping your credit below 580 won’t take you out of a loan, but you will need to provide a significantly larger down-payment to get approved. With credit scores, you need to make strategic decisions that won’t affect you too drastically. Don’t worry if shopping for a loan as a 2022 Mortgage Application won’t do too much damage. If you need help navigating your credit score and getting a home loan you need to work with a professional like myself who is available to help you any time day or night. If you are in the market, please feel free to call me at 888-900-1020, email firstname.lastname@example.org. Have a great day!