Apply for mortgage loans at same time to reduce credit score damage
10/11/2010
By Credit.com Staff
Prospective homeowners often check their credit report and credit score before submitting mortgage applications to make sure they meet the minimum requirements. However, many individuals should keep in mind that each time they submit an application for a line of credit, a "hard inquiry" is placed on their credit file, which causes a slight drop in their credit score.
Although each credit bureau has a different set of procedures, a consumer will likely see their credit score drop between 5 and 20 points after a hard inquiry, according to The New York Times.
Consumers can take a little-known step to minimize their credit score damage. Individuals shopping around for a mortgage may reduce the number of points knocked off their score by submitting all their mortgage applications at once. Most credit bureaus count all credit checks made by mortgage companies as one single request if they are made within 14 to 30 days, the Times reports.
Individuals may also salvage their credit score by knowing a lenders' credit score requirement beforehand and determining whether they qualify for a home loan.
