The MYTH of Credit Inquiries

Multiple mortgage inquiries do not affect a credit score.

When shopping for a mortgage you need to be thoroughly prequalified. This prequalification includes a credit report. Often, clients 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

Hope that helps!