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Cube Inmate · 06-23-2006, 08:42 AM

Credit scoring explanation from the source...a Fair Isaac website says

"Fallacy: My score will drop if I apply for new credit.
Fact: If it does, it probably won't drop much. If you apply for several credit cards within a short period of time, multiple requests for your credit report information (called “inquiries”) will appear on your report. Looking for new credit can equate with higher risk, but most credit scores are not affected by multiple inquiries from auto or mortgage lenders within a short period of time. Typically, these are treated as a single inquiry and will have little impact on the credit score."

I read on another website that the "short period" mentioned above is around 14 days. When you add in the fact that the FICO scores may or may not include credit inquiries from the previous 30 days (it's a secret!), you'll realize that it's impossible to empirically test the effect of making 1 mortgage application versus making 5 in a 2-week period.

So, MoneyGuy...I asked if you were privy to the details of the scoring system, and your answer seems to be a definite negative (my addition of "are you just assuming" was not exactly appropriate, however). And although I don't doubt your mortgage broker's understanding of credit scoring, I doubt that she has access to the FICO formula either.

06-23-2006, 08:42 AM	#40
Cube Inmate First Line Centre Join Date: Apr 2004 Location: Boxed-in Exp:	Credit scoring explanation from the source...a Fair Isaac website says "Fallacy: My score will drop if I apply for new credit. Fact: If it does, it probably won't drop much. If you apply for several credit cards within a short period of time, multiple requests for your credit report information (called “inquiries”) will appear on your report. Looking for new credit can equate with higher risk, but most credit scores are not affected by multiple inquiries from auto or mortgage lenders within a short period of time. Typically, these are treated as a single inquiry and will have little impact on the credit score." I read on another website that the "short period" mentioned above is around 14 days. When you add in the fact that the FICO scores may or may not include credit inquiries from the previous 30 days (it's a secret!), you'll realize that it's impossible to empirically test the effect of making 1 mortgage application versus making 5 in a 2-week period. So, MoneyGuy...I asked if you were privy to the details of the scoring system, and your answer seems to be a definite negative (my addition of "are you just assuming" was not exactly appropriate, however). And although I don't doubt your mortgage broker's understanding of credit scoring, I doubt that she has access to the FICO formula either.