[et_pb_section admin_label=”section”][et_pb_row admin_label=”row”][et_pb_column type=”4_4″][et_pb_text admin_label=”Credit Inquiries – Can They Drop Your Credit Score?” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]

Credit Inquiries – Can They Drop Your Credit Score?

[/et_pb_text][/et_pb_column][/et_pb_row][et_pb_row admin_label=”Row”][et_pb_column type=”1_2″][et_pb_text admin_label=”Spring has sprung” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]

Spring has sprung, which means the real estate market is heating up and many consumers throughout the United States will be taking advantage of the uptick in home inventory to search for that new home. But for the vast majority of Americans, in order to finance any purchase as significant as a new home, a mortgage loan is necessary.

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[/et_pb_image][/et_pb_column][/et_pb_row][et_pb_row admin_label=”Row”][et_pb_column type=”4_4″][et_pb_text admin_label=” At the same time” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]

At the same time, however, it’s wise to shop around between lenders to see who can offer you the lowest interest rate so that you can save the most long-term over the loan terms. In order to do this, lenders need to pull your credit information.
This has a tendency to make consumers uneasy, simply because there’s a misconception out there that when lenders pull credit scores and credit reports, it can negatively impact your overall score.
That’s not the case, just so long as you meet the proper time criteria. Let us explain:

The 30-Day Rule

Not too long ago, if you wanted to buy a home, you’d just call up various mortgage lenders to see what they were offering when it came to interest rates. Times have obviously changed. Now, we’re at the point where a full application needs to be filed – complete with a credit check, income assessment, etc. – as a means of getting preapproved. So, say you file an application with five different lenders. Will all the credit inquiries that occur cause your score to drop?

The answer is “no,” and here’s why: Because those who are shopping mortgage lenders are likely to consider more than one lender, any credit scores and credit reports pulled for such purposes will be ignored so long as they all occur within a 30-day period. It’s only natural for consumers to try to secure the best interest rate possible on such a large purchase, so there’s an exception to be made in such a case. While we’ve used mortgage lending in this example, the same is also true for auto lending and student loans – two other respective fairly large purchases that consumers may elect to shop around for rates pertaining to.

So for those of you out there concerned with what will happen to your credit score – and the possible credit repair you may have to administer – should you shop around when it comes to lenders, just make sure that any of this shopping around occurs within the same 30-day period and your score won’t be impacted in any way.

Go ahead and chase that dream home. You’re not going to be punished for getting preapproved by more than one lender. Just be sure to meet the time requirements. Check out this video for more information.

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checking your credit

Checking Your Credit – Does it Hurt Your Score?

One of the biggest misconceptions among consumers is that if you check your own credit score, you’ll be docked points. Let us be very clear: Checking your own credit score, whether it be once a week or once a month, has no impact whatsoever on your score.

That’s because what you’re doing when you check your credit score is considered a “soft pull.” Other examples of soft pulls may be if you get per-approved for a mortgage or if you receive a credit card offer in the mail saying that you’ve been per-approved.

We’ll repeat — soft pulls have absolutely no impact on your credit score. However, while we note that, it’s also important to distinguish the difference between “soft” and “hard” pulls. Unlike soft pulls, hard pulls do have an effect on your credit score. Hard pulls are done any time you actually get approval for things like a mortgage, car loan or new credit card.

So just how much do hard pulls impact your FICO score? Hard pulls lower your score by five points for six months, so unless you’re having hard pulls done left and right, it’s unlikely that you’ll need credit repair solely because of this. But even so, if you’re in a situation in which you’re trying to repair your credit, it’s wise to stay away from hard pulls, as they won’t help – but can hurt – your score.

To recap: Soft pulls, like when you check your own credit score, have no impact on your overall score. But hard pulls, like when you get official mortgage or loan approval, do.