What Is the Mortgage Credit Check Window?

As you shop for a mortgage, your credit score is an important factor, but doing a credit check can also impact your score. To help prevent a major loss of points on your credit score, consider the mortgage credit check window.

The window allows you to shop at multiple mortgage companies, get approved for specific rates, and choose the cheapest options for your home loan. Learn about the credit check window and ways to take advantage of the time to really make the most out of the mortgage shopping experience.

What Is a Mortgage Credit Check Window?

After you have inquired about a mortgage approval price, a company will initiate a soft inquiry on your credit report to check your scores, debt, and other information. The first time you have the credit checked, you will open up the credit check window.

This means that no matter how many other times you seek out a mortgage approval, you will only have a single inquiry posted on your credit report. The fewer inquires you have, the better your credit score will be in the long run. The process gives you options to shop during the open window of time.

How Long Is the Mortgage Credit Check Window?

To have the least impact on your credit score, keep all your mortgage shopping options within the same window. In the past, the old FICO scoring model gave mortgage shoppers a 14-day window to shop for mortgages and figure out the best options.

The new scoring model allows borrowers to have 45 days without any negative impact on your credit score. The 45-day window makes a big difference because you will have extra time to save up money, improve your score month-to-month, and try to get a better mortgage rate and amount before the 45 days are up.

What Are the Benefits of Shopping at Multiple Lenders?

When you only get the prices from one lender, you may not have the best opportunity to save on your mortgage. Taking a small hit to your credit score will not make a big difference when you are saving thousands of dollars by finding a smaller interest rate or an improved approval amount for your loan.

Seeing the different lenders also gives you an idea of the average amount you will be approved for. You will have a bigger picture of your mortgage opportunities and also have the chance to look at different types of loans, like a First-Time Home Buyers program.

What Happens After the Window Closes?

After the 45 days, any new mortgage quote will include another soft inquiry on your credit report. The new one will also reset the clock and give you another 45 days to shop around for mortgage rates. The credit inquiries on your account will remain there for two years.

Ideally, you do not want to rack up the inquiries every 45 days. When you use a mortgage rate comparison website, you will see all of the options in a single location. You can get fully prepared so the 45 days do not fly by without you taking advantage of the open shopping window.

After the two years, the inquiries are removed from the account and your credit score will bounce back again. If you select a mortgage and purchase a house, a hard inquiry will appear on your credit report as you actually get approved for the loan. The hard inquiry includes the full loan amount and has a much bigger impact on your credit score.

For more information on mortgage applications and prices, contact us at Cornerstone Residential Mortgage. We will help you find an ideal mortgage and take you through each step of the mortgage application and pre-approval process.