Credit Scores and Inquiries
Many consumers don't realize they have more than one credit score.
The scores shown through banks or credit apps are consumer scores, while mortgage lenders must use specialized mortgage credit scores that are only available to lenders.
A mortgage credit inquiry is required to issue a loan approval and typically has a small, temporary impact on your credit. Credit scoring models are designed to allow mortgage rate shopping without significant score impact.
Credit Inquiries
What's the difference between consumer credit scores and mortgage credit scores? Consumer scores from apps and banks use different algorithms than the specialized mortgage credit models required by lenders.
Understanding this difference is key to setting realistic expectations when you apply for a mortgage.
How a Mortgage Credit Inquiry Affects Your Score
A mortgage inquiry typically causes a small, temporary dip in your credit score. Credit scoring models group multiple mortgage inquiries within a 14-45 day window as a single inquiry, allowing you to rate shop without penalty.
This means you can compare offers from multiple lenders without worrying about significant damage to your credit score.