So has the lending world scared you into believing your credit score is your whole meaning in life?\u00a0 Obviously it isn’t, but it does play a very important role in key areas of life.\u00a0 Some you may surprise you.\u00a0 Credit scores could determine insurance rates, employment, opening a bank account, and of course, borrowing money.\u00a0\u00a0Scores are\u00a0especially\u00a0important in mortgage lending.\u00a0 There are several factors which make up a credit score.\u00a0 One of these factors are credit inquiries.<\/p>\n
A credit inquiry means a company or person is “pulling” your credit report.\u00a0 Although there are more ![\"credit](\"https:\/\/teammovemortgage.com\/blog\/wp-content\/uploads\/2016\/12\/excellent-credit-score-checklist-300x200.jpg\")
important factors, credit inquiries generally contribute to 10% of the overall\u00a0score.\u00a0 Therefore, credit inquiries do matter.\u00a0\u00a0This includes someone looking to get an 800 credit score.\u00a0 Furthermore it could include someone that needs just a few points for loan approval.<\/p>\n
Russell Smith<\/span>, loan officer with Blue Ridge Bank Mortgage, has a quote that says it all.\u00a0 “Everyone has a number, so you might as well have a good one!”.\u00a0 So let’s discuss types of inquiries and how they affect mortgage approvals or life.<\/p>\n Credit inquiries are basically broken down into 2 main groups.\u00a0 “Hard inquiries” may affect a credit score.\u00a0 Conversely “soft inquiries” do not affect a score.\u00a0 So it is important to know who is pulling what.\u00a0 There are 4 types of hard and soft inquiries.<\/p>\n Even though hard inquiries are the only ones affecting a credit score, it is important to understand each.<\/p>\n Insurance companies and employers often pull these credit inquiries.\u00a0 This report only displays negative information.\u00a0 These include late payments, judgments, bankruptcies, or foreclosures.\u00a0 Companies look at this report to determine your financial strength and your risk.\u00a0 Statistics show that more credit issues, means higher risk in other areas.\u00a0 Employers in the financial sector or a high security clearance area take this report very seriously.\u00a0\u00a0But in most areas\u00a0it is not a primary reason to insure or hire.\u00a0 Although,\u00a0it does play a role.<\/p>\n Affect on your mortgage approval.<\/strong>\u00a0 These type of credit inquiries will not affect your credit score or your mortgage approval.\u00a0 So, it is a soft pull.\u00a0 Often during the mortgage process, you will hear us say “do not apply for more credit prior to closing”.\u00a0 But a homeowner’s insurance inquiry is often necessary and it is definitely ok for your mortgage approval.\u00a0 Do NOT change jobs during the mortgage process though!\u00a0 Believe it or not buyers do this more than you would think.<\/p>\n This type of inquiry is purely for knowing someone’s credit score.\u00a0 As it will not display any details or makeup of the credit score.\u00a0 Credit card companies, banks, furniture companies, or anyone else looking for a certain type of client uses these.\u00a0 Rather than shotgun a marketing campaign to everyone, companies are able to find their target market.\u00a0 Some may want 800 scores where others may focus on the 580 range.<\/p>\n Affect on your mortgage approval.<\/strong>\u00a0 The public has no control over these inquiries so it obviously does not affect a credit score.\u00a0 These inquiries will not even show up on a credit report.\u00a0 By the way, have you ever wondered why you get so many phone calls or mailings\u00a0after\u00a0applying for credit?\u00a0 The credit bureaus sell your information to companies.\u00a0 This is called “trigger leads”.\u00a0 If you apply for a car loan, this activity is sold to lenders and you will receive marketing.\u00a0 Since you have applied for credit, you are considered a hot lead!<\/p>\n This credit inquiry is self explanatory.\u00a0 It is the individual pulling his or her own credit reports.\u00a0 There are many services that offer one or more of the credit reports for free, but there are some tricks.\u00a0 Watch out for the ones that make you pay for a service to get a credit report.\u00a0 It is very important to check your credit each year so check out this article which explains how and why<\/span><\/a>.<\/p>\n Affect on your mortgage approval.<\/strong>\u00a0 Since this is not a 3rd party pull, it does not affect your mortgage approval at all.<\/p>\n These credit inquiries are a hard credit pull, so it affects your credit score.\u00a0 But as long as you\u00a0understand Especially watch out for this statement during the holidays!\u00a0 “If you open a charge card with us, you will save 30% off of your purchase today”.\u00a0 Sound familiar?\u00a0 Check out our article which explains what this may do to your credit scores.<\/em><\/span><\/a><\/p>\n Multiple credit inquiries will not always affect your scores negatively though.\u00a0 Certain credit inquiries\u00a0are looked at as one.\u00a0\u00a0Examples include shopping for a mortgage, auto, or student loan over a short period.\u00a0 There are many scoring models so the “shopping” range varies from 14 – maybe 45 days.\u00a0 Keep in mind that credit card or finance company inquiries\u00a0are considered multiple inquiries.\u00a0 So\u00a0they could hurt scores.<\/p>\n Affect on your mortgage approval.<\/strong>\u00a0 Standard credit inquiries could play a huge role in a mortgage loan approval.\u00a0 First of all, once you have applied for a mortgage loan, stop applying for new debt!\u00a0 As mentioned, the credit score impact is not as bad as late payments or high balances on cards.\u00a0 But new credit inquiries could cause the following:<\/p>\n Remember that\u00a0even though credit inquiries account for about 10% of a score, it could play a major role in scores and approvals.\u00a0 Hopefully you found this helpful.\u00a0 Check out our other credit related articles<\/p>\n [av_button_big label=’Apply Online to Buy or Refinance a Home Now’ description_pos=’below’ link=’manually,http:\/\/teammovemortgage.com\/apply-online\/’ link_target=’_blank’ icon_select=’no’ icon=’ue800′ font=’entypo-fontello’ custom_font=’#ffffff’ color=’theme-color’ custom_bg=’#444444′ color_hover=’theme-color-subtle’ custom_bg_hover=’#444444′][\/av_button_big]<\/p>\n","protected":false},"excerpt":{"rendered":" So has the lending world scared you into believing your credit score is your whole meaning in life?\u00a0 Obviously it isn’t, but it does play a very important role in key areas of life.\u00a0 Some you may surprise you.\u00a0 Credit scores could determine insurance rates, employment, opening a bank account, and of course, borrowing money.\u00a0\u00a0Scores […]<\/p>\n","protected":false},"author":2,"featured_media":5157,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5,33,97,40],"tags":[811,324,23,687,166],"class_list":["post-5151","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-1st-time-buyers","category-frequently-asked-questions","category-interesting","category-tips","tag-credit-inquiries","tag-credit-score","tag-credit-scoring","tag-credit-scoring-tips","tag-mortgage-credit-score"],"acf":[],"yoast_head":"\nTypes of Credit Inquiries<\/h2>\n
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Account Review Inquiries<\/h3>\n
Promotional Inquiries<\/h3>\n
Self-Pull Inquiries<\/h3>\n
Standard Inquiries<\/h3>\n
![\"credit](\"https:\/\/teammovemortgage.com\/blog\/wp-content\/uploads\/2016\/12\/i-am-a-winner-Copy-Copy-300x200.jpg\")
this area, it will have a minimal to no affect on your credit life.\u00a0 Basically use them in moderation.\u00a0 Obviously to open a credit account with a lender, someone has to pull your credit.\u00a0 Therefore it is important to do your homework and determine if the inquiry is credit worthy.\u00a0 Because standard inquiries will affect a credit score, be wary of applying or opening accounts often.\u00a0 MyFICO.com states “Large numbers of inquiries also means greater risk.\u00a0 Statistically, people with six inquiries or more on their credit reports can be up to eight times more likely to declare bankruptcy than people with no inquiries.”<\/p>\n\n
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