Experts say you should shop around to get the lowest mortgage rates. But can that hurt your credit? Although credit â€œpulls,â€ or formal requests to review your credit report, can affect your overall credit score, TheMortgageReports.com says you shouldn’t worry. Requests by mortgage lenders are a small part of scoring and should affect your FICO score by five points or fewer.
The FICO scoring system is built with consumer protection in mind, and it encourages credit pulls from multiple lenders. The credit bureaus give consumers the right to shop for a mortgage with an unlimited number of lenders without having to fear multiple â€œdingsâ€ to their credit score.
â€œWhen you apply for a mortgage loan with multiple lenders, the credit bureaus count it as a single credit inquiry,â€ according to the website. â€œAll mortgage rate shopping done within a 14-day period will count as a single credit pull, with the bureaus acknowledging the first credit check, then ignoring all subsequent ones.â€
Here are their tips for finding a lender and protecting your credit.
1. Shop around. Talk to at least two lenders, or even five or more.
2. Limit your rate shopping to a 14-day time span to avoid multiple pulls on your credit.
3. Check multiple sources for quotes â€” retail banks, mortgage brokers and online lenders.
4. Don’t be afraid to share your social security number with reputable mortgage lenders. It’s the only way you’ll get accurate rate quotes, instead of best guesses.