You are getting ready to apply for a home loan in Phoenix, AZ. You have done your research, and you figure you have a good chance of qualifying, but you still really are not too sure. In fact, this is not the first time you have applied—and the previous time, you were turned down. You are anxious to get approved, but you are also worried that you will be rejected again. Worse, you are starting to fret about your credit score. What if all these failed attempts to qualify for a home loan are hurting your score?
A lot of consumers worry about dinging their credit scores, but they also are not sure which types of inquiries affect their scores and which ones do not. Naturally there is a lot of confusion in this area, and you may have heard contradicting information.
Types Of Credit Inquiries
There are two types of credit inquiries: hard and soft.
• Hard credit inquiries: These are inquiries which are made by lenders when they are considering giving you a loan. If a hard inquiry is made, it will dent your credit score slightly. That effect will linger for the next two years.
• Soft credit inquiries: These inquiries are typically associated with background checks. Technically, nobody needs your permission to conduct a soft inquiry—employers do this all the time. But soft inquiries do not impact your credit score. Note that checking your own credit score is also a soft inquiry.
When you apply for a mortgage, the credit check run by your prospective lender is a hard credit inquiry. That means it does damage your score.
How big a deal this is depends a lot on your situation. If you have a long, established credit history, the impact of a single hard credit inquiry may not be all that noteworthy. If, however you have a short credit history, the impact could be more significant. And if you are applying for loan after loan, your score is going to get worse and worse.
Naturally, this is the last thing you want to have happen when you are already having a tough time getting approved for a mortgage in Phoenix. That is why it is so important to talk to a mortgage broker before you start sending out applications.
At B Home, I talk to a lot of clients who have no idea whether they will qualify for a home loan or not—or what types of loans they should be applying for given their credit scores and overall financial profiles.
Many of these clients are very leery about hard credit inquiries, and are worried that their credit scores are already too low.
That is why I have developed a different method for figuring out what kinds of home loans clients are likely to qualify for. My method involves getting some basic information and answers to simple questions. Using this information, I can help you to apply for home loans that you are likely to get approved for. This prevents a string of hard credit inquiries and failed applications.
In doing so, your credit is protected and you spend less time hunting for the right home loan. That means moving into your new home in Phoenix soon, and building the life you dream of in our beautiful, sunny city. Give me a call at 602-953-6677, and I will help you determine your qualifications and apply for the home loan that is right for you.