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 â€œtoo many mortgage inquiries lower your credit scoreâ€ 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 Corporationâ€™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: â€œDoes 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 scoreâ€œ
Here is the link: http://www.myfico.com/CreditEducation/CreditInquiries.aspx
PowerHouse Solutions, Inc.
1010 Northern Blvd. Suite 234
Great Neck NY 11021
Licensed Mortgage Banker â€“ NYS Dept. of Financial Services
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