You’re looking into a mortgage so that you can buy a home. Congratulations! You’ve worked up until this point making sure that your credit is what it needs to be to get a loan, but now you’re worried that shopping around may decrease your score and you’re wondering how many points a mortgage inquiry will affect your score.
It is true that hard inquiries will decrease your score, but you can rest easy knowing the impact will largely be marginal. In today’s post, you’ll learn everything you need to know about mortgage inquiries. Spoiler alert: There’s not much to worry about.
1. Time Frame
Contrary to popular belief, the credit system is not trying to work against you. They understand that shopping around for the best rate is in your best interest, and they aren’t looking to punish you for that. For that reason, inquiries into loans like mortgages and automobiles made within a certain time frame (anywhere from 2 to 6 weeks) will actually count as one inquiry.
So, applying for many loan quotes will not hurt your credit as long as you do it fast. And that will save you time and money in the long run!
2. 30-Day Delay
Chances are, if you’re actually putting in hard inquiries, you are ready to buy soon.
There is a 30-day delay between when the mortgage loan is quoted and when it actually hits your credit report. So, those home loans you are applying for aren’t even visible to lenders.
This means that they aren’t seeing the multiple applications you sent in. No reason to worry about lenders subjectively declining you either. They won’t even be able to see it until 30 days after it’s all said and done.
3. How Much Does An Inquiry Affect a Score Anyway?
As with most things credit, it depends. There are many factors and the more storied your credit history, the less any single change will affect it at all. Generally though, even with newer or more sparse histories, a single inquiry wouldn’t be much at all, maybe five to ten points.
Since credit card inquiries do not get lumped together into one, applying for multiple credit cards in any time period would continue to affect your score and the amount of damage it does would compound with each new inquiry.
But with mortgage inquiries, you won’t have this problem. And you should see very minimal damage to your perfectly polished credit score.
You’ve worked hard to get yourself into the position you’re in. Buying a house is an exciting step and you don’t need that feeling to be weighed down by additional worry about every factor of applying for your loan or a few credit points.
Shop around if you’d like and find that loan that works best for your individual needs.
In fact, this is likely to increase your score in the long run, because you won’t find yourself in a loan that you cannot repay because you took the first one offered to you.