Course 1 – Unit 10: Credit Score

Shop Multiple Lenders Without Dinging Credit Twice

When you’re shopping for a mortgage, there is no harm in getting quotes from more than one bank. Closing costs vary by bank, and mortgage rates do, too. However, in order to give you an accurate rate quote, many banks will ask to “pull your credit”. They’ll say they need to make sure you “actually qualify” or that you’re eligible for a specific mortgage program such as the three-percent down Conventional 97 program which mandates a minimum FICO.

Don’t be nervous about the inquiry. The FICO scoring system actually encourages you to get quotes from multiple banks. The FICO system knows that when you make two mortgage applications, you’re only applying for one not two mortgages. Additionally, Shopping for multiple mortgage rates, may result in a better deal, which means you’ll pay less in fees and get a lower rate. Thus, credit bureaus permit consumers to shop for a mortgage with an number of credit inquiries to more than one lender, without fear of “multiple credit dings.”

The truth is,  all mortgage rate inquiries within a 14-day period will count as a single credit pull, with the bureaus acknowledging the first credit check and ignoring all subsequent ones. If you’ve only shopped for one mortgage rate quote, any additional inquiries from other lenders count as only one inquiry.   The bureaus will protect your FICO, and you may get competing offers without any damage to your credit scores.  Good to know, isn’t it?