WHY IT’S IMPORTANT TO AVOID NEW CREDIT AND NEW INQUIRIES WHEN YOU’RE GETTING A HOME LOAN

    Inquiries on made by creditors on your credit report affect your credit score for up to one year from the time the inquiries are made. This has a 10% impact on your credit score. Your score isn’t impacted when you check your own report. It’s only affected if a potential creditor checks your credit. These include department stores, as well as credit card, auto finance and mortgage companies. Here are three steps you can take to improve your credit score in this area:

    • Multiple auto and mortgage inquiries are treated as only one inquiry if made within a short time of each other. So, it’s better to shop for a car or a mortgage over a two-week time-frame, rather than to prolong it over a longer timeframe;
    • Don’t apply for a lot of credit or open multiple credit cards at the same time; and,
    • If you’re thinking of applying for a mortgage within the next 90 days, it would be good to wait until after your loan closes before you apply for any new credit.

    Also, keep in mind that any new credit or new credit inquiries can raise a red flag when you’re in the middle of a loan application.  That’s because mortgage lenders are required to look into this, and the possibility of new debt could endanger your ability to get qualified for a home loan.

    Let me know if you have any questions or if I can be a resource to you in any way!

     

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