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How do credit inquiries affect your mortgage qualifying?

November 20th, 2015 by Sean Stephens

How do credit inquiries affect your USDA loan application?

If you want to rank the type of questions we receive, credit inquiries are right up there.

While we know that they can impact your score, how do credit inquiries affect your mortgage qualifying?

Now as we all know, Second Opinions are always important. So if you have financing questions and are working with another lender, we offer this complimentary service where you get access to an expert second opinion.

Today’s video tip will cover important details for you to know in order to keep that all important financing on track.

Let’s get started with the details!

So, how do credit inquiries affect your loan mortgage qualifying?How do credit inquiries affect your USDA loan application

As a starting point, credit inquiries contribute roughly 10% of the overall weight in the credit scoring model.

Before we go too far, please note that there is no rule which states you will lose two or three points for each inquiry. Inquiries affect everyone differently. For example, if your credit profile is stronger it will be less of a factor when compared to someone with weaker credit where it will have more of an impact on credit score.

You may have heard this terminology before, but inquiries are classified into two categories: Hard Inquiries (Hard Pull) and Soft Inquiries (Soft Pull).How do credit inquiries affect a USDA loan application

Fortunately, soft inquiries do not affect your credit score. They are confusing to many people though because they report on your credit report, but do not affect it. Some examples of soft inquiries or a “soft pull” are:

  • Checking your own credit score
  • Pre-approved credit card offers
  • Employment checks

Now, hard inquiries are the ones that you have to worry about. If you apply or initiate an application, then it will be factored into your credit score.

Some examples of hard inquiries are:

  • Applying for an auto loan, student loan, business or personal loan
  • Applying for a credit card
  • Applying for a mortgage
  • Requesting a credit limit

One of the most important things to remember is that if you are unsure whether a financial action you are about to take will result in a credit inquiry, just simply ask.

Regardless of the type of inquiry, always disclose to your lender if you have opened up any new debt either before or during the application process. This can save time, frustration, and is always required so a borrower can fulfill their disclosure requirements.

Now before I go, I just want to thank everyone for their continued referrals and trusting us with all of their mortgage needs. Whether it be FHA, USDA, VA, or Conventional Loans – Just call or email to discuss your scenario and let us show you the “Metroplex” difference!

800-806-9836 Ext. 280

I want everyone to make it a great day, and look forward to seeing you right here for the next tip of the week!

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