Interest Rate Shopping & Credit Scores

Perhaps the most frequent question I get about credit scores pertains to multiple inquiries. Those shopping for a mortgage are often hesitant to apply at multiple banks for fear of seeing their credit score fall.  This article – straight from the horse’s mouth at Equifax – points out that the three major bureaus provide you with a 30 day window in which to shop without having a score affected.  Multiple inquiries are treated as a single inquiry.

In fact, most every lender is using a tri-merged report, including scores for TransUnion, Equifax and Experian.  Sidenote:  TransUnion is often the lowest score for us Midwest folk as they have more information on us than the other two bureaus, increasing the odds that they’ll pick up that Heat & Electric bill your roommate “forgot” to pay the last semester of college.  Point being, if one lender provides you with a report, use the middle score when calling for rates and you can avoid multiple inquiries anyway.

The last point I’ll make on this topic:  In practice, if your score is 770+, you need not worry about multiple inquiries over any period of time.  740 is all you need for the best rate these days.  Those hovering closer to 700 need to be far more concerned with multiple inquiries.

For more information, call 262-641-1319 or email me!  I’m here to help!

Posted by Jon Reetz  NMLS ID#296610

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