Today we’re here to answer a few questions about why it’s never a good idea to let anybody pull your credit during the mortgage loan process without consulting with your mortgage loan officer first. Let’s get right to it.

How do credit inquiries affect your credit score?
When you apply for credit, it’s considered a “hard inquiry.” All hard inquiries result in a reduction of your credit score. However, inquiries are weighted. Mortgage and car loans will reduce your credit score by fewer points than a store or airline credit card. Each credit union will give you a different score, but hard inquiries result in a reduction in each case.

We are switching utilities. What if they pull our credit?
Utilities are a little bit different than a credit card or car loan. It’s considered a soft pull. They will pull your payment history and they may pull a credit score on their site, but it’s not an actual hard inquiry. We won’t see a reduction or anything on our side from the utility companies. So, getting your credit pulled from the utility company won’t affect your mortgage loan application.

“You should avoid hard inquiries as much as possible.”

What services and companies should you give permission to pull credit?
It’s going to come down to the things you need to have in place when you moved into your new home. Your utilities, cable, phone, internet, etc. You never want to have any hard inquiries unless they are absolutely necessary. That’s why it’s important to have a great one-on-one relationship with your loan officer so you can talk these situations out and find a solution.

Do lenders run a second credit check before closing?
Some loan programs do require a soft pull or a second credit check prior to closing. It isn’t a hard inquiry, so you won’t see a reduction in your score. You always want to err on the side of caution. If you’re planning on buying a home, pay extra attention to your security, because even little mistakes could cause you to lose out on a loan.

If you have any questions for me or anyone on my team, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.