Buzz
If you're planning to buy a house, you'll likely shop around for loans. This means several lenders will review your credit, which could impact your score. However, FICO takes this into account when calculating your score.
Here's how FICO deals with multiple credit inquiries when you're only applying for one loan:
FICO Scores disregard mortgage, auto, and student loan inquiries made within 30 days before scoring. So if you find a loan within that window, the inquiries won’t hurt your score while you’re comparing rates. Furthermore, if there are inquiries older than 30 days, FICO will treat multiple inquiries within a typical shopping period as one. For older FICO versions, the shopping period is a 14-day span, whereas the newer versions extend it to 45 days.
What about the differences between old and new formulas? Unfortunately, that’s up to the lender. They can choose whichever version of the scoring formula they prefer to have the reporting agency use for your score calculation.
Don't worry if you're comparing lenders and they keep pulling your credit report. FICO assures you that your score won’t take multiple hits if it happens within a specific time frame. However, it's recommended to shop around for rates within that focused window. For more information, check out the link below, and don't forget to explore our guide to repairing your credit.
Photo by Mark Moz.
