One of the things you’ll see when you pull up your credit report are recent inquiries. This is, for example, if you apply for a store credit card or a car loan, etc, and the bank pulls your credit to make sure you’re a good candidate for that credit. Every new inquiry on your report negatively impacts your credit score. Not much, but it does.
So, will applying for a mortgage negatively affect your credit?
The bottom line – No, applying for a mortgage will NOT hurt your credit.
Let’s take a deep breath and break it down.
It’s a great idea to shop around to find the best lender for you. One that not only can offer a great rate, but probably more importantly, who is looking out for your best interest and can educate you throughout the process so there are no surprises and no confusion.
When you apply for a mortgage, the lender will pull your credit, which, as we know, credit inquiries can have a small impact on your credit score. But mortgage inquiries are treated differently than credit checks for consumer credit, like credit cards. According to the Consumer Financial Protection Bureau, if you’re shopping around for a mortgage company, various lenders may be pulling your credit. But don’t worry – all credit checks pulled by mortgage lenders within a 45-day period will be lumped together and counted as only one. Why? Well, because it’s assumed that all of these inquiries will result in only one mortgage.
And just think – If you make your mortgage payment on time every month, you could actually boost your credit score over time. Home ownership has so many advantages.
If you’re ready to apply for a mortgage (without fear of affecting your credit score), visit our website at www.homespiremortgage.com to find a Homespire Loan Officer near you.