8 Jun

Will a ‘Credit Inquiry’ Lower my score?

General

Posted by: Gurcharan Singh

 Your ‘beacon score’ is an indicator for a lender as to whether a client is likely to make payments on time and in full. Beacon (credit) scores are sometimes referred to as FICO scores, and both names are derived from the credit bureaus that developed the scoring system. Keeping track of this important number is vital. Inquiries to your score are recorded and tracked on the credit report as well. However not all inquiries are created equal. If your score is at or near 600 or 680 then one must be more cautious with inquires as this affects certain mortgage product availability.

Credit Inquiries

Each time a creditor (potential lender) checks your credit report, a record is created of this event. There are two types of inquiries, soft and hard. A soft inquiry occurs when you pull your own credit report. (Worth doing on an annual basis and FREE via mail at either Equifax or TransUnion.)

A hard inquiry occurs when submitting loan or credit applications with your written authorisation to inquire. A lender cannot process a hard inquiry without your written permission. There is a process to have non-authorized credit inquiries removed from your report.

Working with an independent Mortgage Broker typically results in one inquiry on your bureau for the use of multiple lender partners of that Broker. Thus more than one rate-hold can be placed with more than one lender without negative credit consequences via a Broker. Yet another great reason to work with a Dominion Lending mortgage professional!