Shopping for a mortage?
Answers:
Your Fair Isaac (FICO) credit score suffers because of the hard inquiries, a few points per inquiry.
10% of your Fair Isaac (FICO) credit score is about new lines of credit. Every time you apply for credit, the lender makes a hard inquiry into your credit history, and this type of inquiry hurts your FICO score a few points. You get all these hard inquiry points back over the course of a year after the hard inquiry, and the inquiry falls off your reports at the 2-year mark.
FICO makes a special exception if you apply several times for the same type of secured loan (auto, furniture, mortgage) in a 14-day time period AND the lender is coded as a lender for that type of loan (Example: you apply to 7 different mortgage loan companies in 14 days for an mortgage loan and all the lenders are coded as mortgage lenders). FICO will count all the applications and hard inquiries as ONE hard inquiry, because they realize that for a large loan like that, people often shop around for the best rate.
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If you are getting a lot of hits on inquiries for your credit score that can affect your score negatively.
I shop around and do not have someone pull by credit report until I think I want to work with them.
Or use a broker that will pull your score once and then shop around for you.
Some companies may see a large number of inquiries on your credit, and think that perhaps you have been turned down already. Now your coming to them, and unless it's stellar they may read what they want into the number of inquiries.
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