Posted on: 29th Jun, 2011 01:41 am
Well, I'm planning to take out a mortgage in order to buy a property. However, I have been asked to shop around. But I have heard that too many credit inquiries will hurt the credit score. Is it true?
Hard credit inquiries do hurt credit scores. Hard credit inquiries are those inquiries which are made in order to offer you a loan or credit. Borrowers who have multiple inquiries on their credit record are actually considered to be risky of default. Normally, borrowers who dont have a good credit record often contact many lenders hoping to find one who will approve them. However, you should note that credit inquiries will not significantly impact your credit rating if you do all your shopping in a short period. Credit bureaus ignore auto and mortgage inquiries that occur within a time period of 30 days.
Those last two sentences of Niicss' are very important. Shopping for a mortgage in a relatively short period of time will result in a few companies checking your credit, but those "hits" are not considered individually. Rather, they are lumped together and are treated as one inquiry. Therefore, mortgage shopping isn't detrimental to a credit score if done in a short period of time.
