Financing in 55303>Question Details

lady1982, Other/Just Looking in Minneapolis, MN

Working with mortgage company

Asked by lady1982, Minneapolis, MN Wed Aug 24, 2011

Can someone tell me the difference in working with a mortgage company and working with a loan officer from a bank and if I work with a couple different ones would each count as an enquiry when they check my score?

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Yes, each time your credit is checked it counts as an inquiry, and it will appear for all other future creditors to see when they also check your credit.

Read this and educate yourself http://www.myfico.com/crediteducation/creditinquiries.aspx

What is an "inquiry"?
When you apply for credit, you authorize those lenders to ask or "inquire" for a copy of your credit report from a credit bureau. When you later check your credit report, you may notice that their credit inquiries are listed. You may also see listed there inquiries by businesses that you don't know. But the only inquiries that count toward your FICO score are the ones that result from your applications for new credit.

Does applying for credit affect my FICO score?
Fair Isaac's research shows that opening several credit accounts in a short period of time represents greater credit risk. When the information on your credit report indicates that you have been applying for multiple new credit lines in a short period of time (as opposed to rate shopping for a single loan, which is handled differently as discussed below), your FICO score can be lower as a result.

How much will credit inquiries affect my score?
The impact from applying for credit will vary from person to person based on their unique credit histories. In general, credit inquiries have a small impact on one's FICO score. For most people, one additional credit inquiry will take less than five points off their FICO score. For perspective, the full range for FICO scores is 300-850. Inquiries can have a greater impact if you have few accounts or a short credit history. Large numbers of inquiries also mean greater risk. Statistically, people with six inquiries or more on their credit reports can be up to eight times more likely to declare bankruptcy than people with no inquiries on their reports. While inquiries often can play a part in assessing risk, they play a minor part. Much more important factors for your score are how timely you pay your bills and your overall debt burden as indicated on your credit report.

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. For FICO scores calculated from older versions of the scoring formula, this shopping period is any 14 day span. For FICO scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span. Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO score.

What to know about "rate shopping."
Looking for a mortgage, auto or student loan may cause multiple lenders to request your credit report, even though you are only looking for one loan. To compensate for this, the score ignores mortgage, auto, and student loan 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 mortgage, auto, and student loan 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. For FICO scores calculated from older versions of the scoring formula, this shopping period is any 14 day span. For FICO scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span. Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO score.
1 vote Thank Flag Link Wed Aug 24, 2011
When it comes to brokers or bank, the difference is how your loan is processed. A broker will shop for the best rate and terms. The bank is only one location and thus one rate. Usually the rates are similar unless you have a unique situation. Comes down to who you are the most comfortable with in getting the loan done.

The effect of inquiries for credit is negligible so shop away.
0 votes Thank Flag Link Thu Apr 17, 2014
Banks and mortgage brokers are very similar. The rates don't vary much at all for the same loan, i.e. FHA, USDA, VA, Conventional, ARM. The difference between banks and brokers is that a bank has its own particular requirements and if your situation doesn't fit their guidelines, they will turn you down. A mortgage broker shops different and lenders for you to find ones that will accept you particular situation.

Whether you choose bank or broker, you should find someone who answers your calls and questions promptly and you're comfortable working with.
0 votes Thank Flag Link Wed Aug 24, 2011
Don't woory about your score; Mortgage inquireries do not affect your score.

As far as your question; I have found that it makes a lot more difference the people you are talking to, than the Company:

The Agent can make it or break it as far as working FOR you, searching for the right loan, and getting you the best deal. If you aren't exceited about working with that person, move on.

Good luck and may God bless
0 votes Thank Flag Link Wed Aug 24, 2011
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