Credit Score in New York>Question Details

Anthony G., Home Buyer in Queens, NY

I got my credit report run for a preapproval about 6 mo. ago. Is your credit score affected (ie lowered ) on the preapproval app or the loan app.?

Asked by Anthony G., Queens, NY Wed Nov 17, 2010

middle score is 720. dont want it to drop lower

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11
Jim Simms’ answer
Credit scores are fluid, they can change daily or even several times a day. Even a hard credit pull will not have the impact most consumer financial moves do. One dollar too much on a credit card could have a much more dramatic impact.

There may be some information of interest on this subject in my blog entry Credit Repair can be a Crime

See the blog link below, hope this helps,
1 vote Thank Flag Link Fri Nov 4, 2011
Many folks believe that “too many inquiries” on their credit reports will lower their credit scores. This is basically UNTRUE when it comes to shopping for a mortgage.

I went to the source to verify this information: Fair Isaac which is the company that created and continues to upgrade and maintain the credit scoring systems. Their website clearly indicates that mortgage inquiries do not affect a credit score.

And I quote: “Does the formula treat all credit inquiries the same?
No. Research has indicated that the FICO score is more predictive when it treats loans that commonly involve rate-shopping, such as mortgage, auto and student loans, in a different way. For these types of loans, the FICO score ignores 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 rate-shopping inquiries older than 30 days. If it finds some, it counts those inquiries that fall in a typical shopping period as just one inquiry when determining your score.”

You can read this and more great information about credit scores on their website: MYFICO.com

Trevor Curran NMLS #40140
0 votes Thank Flag Link Fri Nov 4, 2011
the real answer is yes it will effect your score. How much is the unknown. It is true there are two types of inquires, hard and soft. Hard is anytime you apply for new or additional credit. These inquiries will stay on your report for 2 years and will effect your score for one year. Also with mortgages and autos you have a 45 day window to shop. What that means is that if you apply for a mortgage today, you can apply for a mortgage with as many lenders as you want as long as you do it within 45 days of the first one and those are all grouped together as one for scoring purposes. Also when you apply for a mortgage your score will not take the "score effect" for 30 days. A hard inquiry can cost you as much as 50 points, although that is rare, it really depends on what score card you are one. Most people only see a few point decrease for the inquiry, but be careful what advice you follow when it comes to this. Good Luck
Web Reference: http://www.MyHopeNow.com
0 votes Thank Flag Link Mon Jan 24, 2011
Yes, but only very slightly. Its nothing to worry about in most cases, especially if the credit checks are run 6-months apart.
0 votes Thank Flag Link Fri Jan 21, 2011
The difference isn't going to be more than 2 points. if it was run 6 months ago, and you have anything different now than you did then, it could change just because of that. Running it again 6 months later does not have the effect of having 6 people run your credit over a 1 month period. I am not sure where you received your pre-approval, but if I am putting my name on something, I won't go with a 6 month old credit report.
0 votes Thank Flag Link Wed Nov 17, 2010
There are 2 kinds of credit inquiries. Those that are known as "soft" inquiries generally do not bring down your score by more than a few points, and the mortgage broker's credit inquiry would be in fact a soft inquiry.

Each time you: apply for a new credit card, ask your credit card to lower your rates or increase your line of credit, apply for a loan or just a pre-approval letter, cancel a credit card, your credit score will be negatively impacted. During your search to buy a home try to avoid all of the above except of course the unavoidable preapproval inquiry, and update it as needed. Your score is fine by the way.
0 votes Thank Flag Link Wed Nov 17, 2010
The score can be affected, but more than likely not by much--see link for additional information.
http://www.myfico.com/crediteducation/creditinquiries.aspx
0 votes Thank Flag Link Wed Nov 17, 2010
It is typically best to talk to your mortgage loan officer that ran your credit. My experience is that only one preapproval will not change your credit score. Make sure you also look at your credit perodically to make sure nothing is on there that you do not know about.
0 votes Thank Flag Link Wed Nov 17, 2010
Dear Anthony,
Dear Anthony,

In short the answer is yes your credit score is lowered. Typically less than five points or less because this is considered a hard inquiry.

Please see the attached link for an extesive explanation.

Best of luck.

Nirmala Caraballo
Licensed Real Estate Agent
Cruse Realty
1408 White Plains Road
Bronx, NY 10462
Tel.: 646-479-7873
Email: nhcaraballo@yahoo.com
0 votes Thank Flag Link Wed Nov 17, 2010
Anthony,

It's best to talk to a mortgage professional about that, but from my experience, unless you have too many inquiries into your credit, a loan application won't affect the score.

Hope this helps,

Eugene Kopman
Associate Broker
BOND New York
Direct: 646-39-RENYC (646-397-3692)
eFax: 646-217-3737
E-mail: Eugene@BondNewYork.com
http://www.facebook.com/REIronHorseNYC
Twitter: REIronHorseNYC
0 votes Thank Flag Link Wed Nov 17, 2010
Shop your loan out to several companies, tell them that your middle is 720 if you are wanting to compare differences in fees

always ask for an initial fees worksheet and compare line by line. Beware, many online lender intentially under state fees, including interest rates to draw you in
0 votes Thank Flag Link Wed Nov 17, 2010
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