Effect on Credit Report
Applying for a mortgage, especially the first time, can be scary. Going into debt for a large investment may be a good choice, but it can still affect your credit for years to come. Many lenders insist on immaculate credit before approving a loan, causing many consumers to pause before applying for credit elsewhere if a mortgage falls through.
Asking for the loan can affect your credit report. It is considered a "hard pull" inquiry, whereas a "soft pull"--your report being checked by you or an employer--does not show up. But apply for the mortgage; the final results should not cause anxiety.
Applying For Numerous Mortgages
The consumer wants to show the highest score possible to get the best loan available, usually 630 and above. When a potential lender pulls your credit report, it creates an "inquiry," which lowers your score, usually less than 5 points. However, if all mortgage credit requests are completed within 45 days, they are "bundled" together, rather than individually. So at the worst, your score should be affected only by 5 points or less.
Shopping Around
If you suddenly make numerous credit requests, that usually affects your credit score negatively. However, the system is improving--credit scores currently reflect if a consumer is merely looking for the best rate available, and count them as one score (the bundling again), or completely ignore numerous inquiries. This is something you can explain to a mortgage lender, should the topic come up.
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