My husband and I are planning to buy a house and we are getting preapproved. We went through two lenders (Lending Tree and AIG). I hear that each time you run a credit report it takes out 30 points? Is that true? Why does it drop at all? Thanks in ahead for the answers! This is our first home, if it makes any difference.
2006-08-15 07:21:43 · 5 answers · asked by jade11378 3 in Business & Finance ➔ Credit
You are probably going to get different answers from different people because nobody really knows exactly how each of the 3 bureaus calculate their scores, they all use different formulas however this is my understanding.
Typically you will be told that your score drops 3 points every time an inquiry is made however, when you are searching for a home mortgage, the bureaus take into consideration that you will be shopping around. Most will allow you multiple mortgage credit inquiries within a 2 week period, so as long as you have had your credit pulled within that 2 weeks you can keep pulling and pulling and pulling, "theoretically" it should have no effect on your score.
Now if you have found that your score has dropped you must look at other factors such as credit card balances. Every creditor reports your information at different times so lets say they pull it on Monday and your score was 686 and then the other lender pulled it on Thursday and your score was 672, it may be because a credit card balanced changed and that company reported the new information on say Tuesday, this would cause your score to be different.
Sorry for rattling on, so to answer your question. Mortgage inquiries are allowed numerous times within a 14 day period and it should not effect your credit score.
Happy house hunting.
2006-08-15 07:35:02 · answer #1 · answered by LouisArchuleta 2 · 0⤊ 0⤋
Good news According to Fair Isaac, multiple inquiries to automobile or mortgage lenders within a short period of time (usually 30 days) generally count as a single inquiry. Thus, a little shopping for the best interest rate should not hurt your credit score.
2006-08-15 07:29:07 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Different companies use different scoring methods to determine your credit score, but having a credit search on you does log on your account, and companies trying to score your credit will know that a (company name) has done a credit search on you, but does not know if it was success-full or not.
So you dont actually go down 30 points, but if you have more than two/three searches in a short space of time, that can have a negative affect on your credit score, so if you get turned down for credit/loan etc then check to find out before applying for another search, then if you get turned down again, wait for up to 6 months again, then you should have better look.
2006-08-15 07:33:46 · answer #3 · answered by new2wales06 1 · 0⤊ 0⤋
Average is 3-5 points - can be as high as 8 per run. If you are going for a mortgage - it will run 3 so about 20 points.
2006-08-15 07:27:23 · answer #4 · answered by rab2344 4 · 0⤊ 0⤋
about 10 points. i am a broker i swear to you i beat their rates. email me
2006-08-15 07:38:03 · answer #5 · answered by michaelpevans73 1 · 0⤊ 0⤋