What is the impact of a credit inquiry on my scores?
The impact of an inquiry is small and temporary. Credit scores are based on risk to a creditor. This risk of an inquiry is just that there might be a new account that isn’t reflected yet. After a few months that risk has passed and your score should recover any small hit it may have taken. As a mortgage broker, we shop dozens of lenders to make sure you get the best mortgage for you, with only one application and one credit pull.
Why do I get calls after having my credit pulled & How do I prevent it?
Under the Fair Credit Reporting Act (FCRA), the Consumer Credit Reporting Companies (Equifax, Experian, & Transunion) are permitted to include your name on lists used by creditors or insurers to make offers of credit or insurance that are not initiated by you. This is why when you have your credit pulled you may experience phone calls, text messages, and mail offers.
The FCRA also provides you the right to “Opt-Out”, which prevents Consumer Credit Reporting Companies from providing your credit file information for prescreened offers. This should prevent the “spam” that you’ve likely experienced and it will cut down on the preapproved credit cards filling your recycling bin.
Why do I have to pay for my credit report upfront?
Credit report fees are set by the credit bureaus (Equifax, Experian, and Transunion) and FICO. The bureaus collect credit data and FICO creates your credit scores. As a mortgage broker, we operate on razor thin margins to pass as much savings as possible along to you. Rather than charging hundreds (thousands even) in extra fees at closing, we have our clients pay for their credit reports up front (rather than at closing) so that when you close on your new home, you’ve only paid for your report and not the reports of everyone that may not have qualified. Just another way we save you money!
Why are my scores different depending on where I pull them?
The credit bureaus collect credit data (Equifax, Experian, and Transunion) and FICO creates your credit scores. FICO has a number of different scoring models for each kind of transaction and each of these models render a score for each bureau. This multiplies to dozens of FICO scores per consumer, but all mortgage companies use the same mortgage specific scores.