Compare Mortgage Rates Online to Protect Your Credit Score
08/20/2010 If you're looking for a mortgage, chances are you're comparing multiple lenders. You should be, at least. Compare mortgage rates, loan programs, credit score requirements, and so on in order to find the best deal. But there are good ways and bad ways to do this--and some of the bad ways put your credit score at risk.
You may know already that you shouldn't take a lender's initial rates at face value. It's not that the lender is dishonest. But the advertised rates are probably the lowest possible rates, not the ones you'll necessarily get. Your unique qualifications and requirements may get you a different mortgage package with different stipulations. In order to find out for sure what a lender can offer you, you'll have to go deeper and submit your information. This is where the damage to your credit score may occur.
In order to provide accurate rates for you, lenders need access to your personal information. Not all of this information is necessary, but all of it is typically required, and lenders will likely pull your credit score as a matter of rote.
When credit bureaus detect a high number of credit report pulls and no new lines of credit, they will conclude that you've been turned down for credit. This may lower your credit score.
Why is this dangerous? Think about it. If you're applying with multiple lenders in order to get the most accurate rate quotes, your credit report is being pulled every time. The more thorough you are in your search--the more lenders you investigate and compare--the more risk you place on your credit report.
The best thing to do when evaluating lenders is to use a simpler tool: the internet. Lender comparison services on the web will allow you to see personalized quotes from numerous lenders without providing more than the minimal amount of information. Whether you're looking for a VA home loan, an FHA home loan, a reverse mortgage, or some other mortgage package, use the internet to localize your search and compare multiple lenders at once. Your credit score will be safe, and you'll save time, too.
