Credit Score in New York>Question Details

djdave718, Home Buyer in Brooklyn, NY

I've been told you can get several pre-approvals in a certain time period where as it only affects your credit once. Is this true?

Asked by djdave718, Brooklyn, NY Mon Mar 25, 2013

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Good afternoon djdave718,

We certainly encourage you to shop around to find not only the most favorable terms for your mortgage loan, but also the best mortgage professional to work with.

The concept that “too many mortgage inquiries lower your credit score” is a MYTH. If you had other mortgage inquiries in the past 30 days, the system treats a new mortgage inquiry with no effect. The original mortgage inquiry may have an effect, but your score won't drop much. (*see quote from myFICO.com below)

I have seen this personally with the thousands of credit reports I have reviewed over my 23 year career as a mortgage professional. I believe in TRUTH, not MYTH. I have included for your information a link to the Fair Isaac Corporation’s website so that you can verify the truth for yourself about this oft-quoted myth.

Fair Isaac is the company that created maintains the credit scoring systems. Their website clearly indicates how mortgage inquiries affect a credit score.

From myFICO.com: “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.

Will my FICO score drop if I apply for new credit?

If it does, it probably won't drop much. If you apply for several credit cards within a short period of time, multiple inquiries will appear on your report. Looking for new credit can equate with higher risk, but most credit scores are not affected by multiple inquiries from auto, mortgage or student loan lenders within a short period of time. Typically, these are treated as a single inquiry and will have little impact on the credit score“

Here is the link: http://www.myfico.com/CreditEducation/CreditInquiries.aspx

Trevor Curran
NMLS #40140
Mobile: 516-582-9181
Office: 516-829-2900
Fax: 516-829-2944
PowerHouse Solutions, Inc.
1010 Northern Blvd. Suite 234
Great Neck NY 11021
Licensed Mortgage Banker – NYS Dept. of Financial Services
NMLS#3528

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0 votes Thank Flag Link Tue May 14, 2013
The reporting bureaus will see that they are all related to buying a home and shouldn't affect your score as much. If you go through a broker they will shop for the best rate and you'll only have to pull it once.

Chris
0 votes Thank Flag Link Mon Mar 25, 2013
It is true, and if your credit score is that shaky, maybe it's not ready to carry a thirty-year mortgage commitment just yet.
0 votes Thank Flag Link Mon Mar 25, 2013
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