I hear "I Don't Want My Credit Pulled Because It Will Lower My Credit Scores!" on a fairly regular bases, when I tell a Borrower who is looking to be Pre-Approved for a mortgage that I need to run their credit in order to Pre-Approve them.  The reason why a Borrower will give me this response is usually because of one of two reasons.

The first is because they have already talked to another Loan Originator who has told them to not let anyone else pull their credit, because it will lower their credit score.  Generally the reason why a Loan Originator would tell a Borrower this is because they want to eliminate the competition, so they will scare the Borrower by telling them this.

The truth is that if two Loan Originators pull a Borrower's credit within 14 days of each other, it will only count as 1 credit pull, and have absolutely no impact on the Borrowers credit score.  In fact the Borrower's credit can be pulled several times within that 14 day period, and it will only count as one credit pull.  Could the Borrower see a change in their credit score from one pull to the other?  Absolutely, but it will not be as a result of the credit pull, it will be because a Creditor has reported to the Credit Bureaus in between credit pulls.  Having said this a Loan Originator maybe correct in advising a Borrower to not have their pulled if the Borrower is boarder line on being able to qualify for a mortgage.  But the Loan Originator should clearly explain why, and that the Borrower has the 14 day window to talk to competitors.

The second reason why I get the response "I Don't Want My Credit Pulled Because It Will Lower My Credit Scores!" is because the Borrower knows that their credit is not good, and wants to see if they can get a Loan Originator to give them a Pre-Approval with out pulling their credit.  To do so is silly on the part of the Borrower and Loan Originator.  If the Borrower makes an offer on a property, and it is accepted, the Borrower's credit will have to be pulled in order to submit a loan, and everything will fall apart at that point.  By the way Borrowers who don't want to have their credit pull for this reason will ALWAYS tell me that they have great credit.

If a Borrower does not let me pull their credit our conversation is a very short one.  I will not consider even giving a Borrower a Pre-Qualification Letter based on looking at their credit later.  If a Borrower does not let me pull their credit, they are wasting my time, their time, and the Realtors time.

There are two things that are an ABSOLUTE MUST when Pre-Approving a Borrower:

  • Running a Borrowers Credit Report, which will show their credit scores, and monthly revolving debt.
  • Looking at a Borrowers Income, so that Debt-To-Income Ratios can be establish early on the Pre-Approval process.

These two things are an ABSOLUTE MUST, anything short of this early on in the process is a waste of everyone's time.

 

  **********************************************************************************

  Info about the author:

 George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

 
Star Posted by George Souto on 05/29/2012 06:49 AM   Comments (80)   Miscellaneous Topic in the Mortgage / Finance Channel   credit scores  
Originally posted at: George's Blog: I Don't Want My Credit Pulled Because It Will Lower My Credit Scores!
Short URL: http://actvra.in/BKp
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80 Comments on I Don't Want My Credit Pulled Because It Will Lower My Credit Scores!

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MAY
30
199,373 Points 4 Featured Posts
I had a buyer that was shopping around online for a mortgage but when it came time to apply when she found a home her score dropped 20 points, pushing her under qualification. Her new, local loan officer told her that was the reason & told her to wait a month & it should come back up. Supposedly, one of the sites she was on sent her info out to around 8 different places, who all pulled her credit. Thankfully, this was when homes were sitting & the home she wanted was still available. Waiting a month did the trick & her score popped back up & she was OK. I've been told about time frames where credit scores shouldn't be affected & I'm really not sure how many other loan officers she went to & the true time period for her, but this was surprising.
1:02pm • #63

Good posting George. Lately, I also request for a complete copy of their tax returns. Unreimbursed Employee Expense is another culprit to watch out for.
2:11pm • #64
202,416 Points 11 Featured Posts Outside Blog Attended Rain Camp

OK, I can certainly understand what you're saying, however, I was also of the impression that the more you had your credit pulled the more concerned a potential lender may become as to why you're having it pulled so much. I've always heard that it was a red flag.
3:18pm • #65
254,732 Points 9 Featured Posts Outside Blog Called Shot Master

George- Great post! I've learned those that kick and scream about getting pre-approved aren't serious or know they have bad credit. It's a red flag. I always thought it was 30 days so I'm glad you noted it's 14. I'm going to re-blog.
3:37pm • #66
1,950,410 Points 478 Featured Posts Localism Sponsor Attended Rain Camp Called Shot Master

If a prospective buyer will not permit a loan officer to pull and review their credit report, that loan officer can do nothing for them AND NEITHER CAN I.

 
3:48pm • #67
548,445 Points 3 Featured Posts Outside Blog

George thank you for clearing up some muddy waters for me, so that I might properly inform buyers
3:48pm • #68
265,330 Points 1 Featured Post Outside Blog Called Shot Master

Both scenarios you use are good ones. The first LO is trying to inhibit the competition, and the second one is the guy trying to hide crummy credit. Does he think he can even begin to be approved without a credit check? Jeez.
6:24pm • #69
1,023,886 Points 15 Featured Posts Localism Sponsor Outside Blog Called Shot Master

Great post.  Comparing loans is hard and some play upon the fears of buyers.  Sometimes you need several quotes just to find the right loan and because a bank requires a loan approval from them.
9:27pm • #70
MAY
31
498,020 Points 13 Featured Posts Outside Blog Called Shot Master

Hi George, excellent post.  I have heard a buyer can have up to four pulls before it affects their score.  True?
3:12am • #71
1,360,111 Points 244 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Bob, there is no limit on the number of credit pulls that are done within 14 days from start to finish.  However, a Borrower should limit the number of Lenders that they give their personal information to, to those that they are actually considering doing their mortgage with. 
5:08am • #72
1 Featured Post Outside Blog

I was with a buyer last night who said the same thing so great info about the 14 days thank you
5:59am • #73
866,303 Points 18 Featured Posts Localism Sponsor Attended Rain Camp Called Shot Master

George -- this does come up quite often.  The problem some buyers have run into is loan originator #1 pulls credit and tells borrower don't let anyone else pull you credit.. The meet with me and I am not at all happy with lender 1 (I won't go into details on a public forum).. and I recommend another loan originator some 30 days later.. how much of an impact on the credit score will that have --- assuming NOTHING has changed.
7:46pm • #74
1,360,111 Points 244 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Joan, I don't know the exact point impact, but it is minimal.  However, after 30 days Creditors are bound to have reported to the Credit Bureaus again, and what they report and transpired during those 30 days could have a noticeable change. 

So the pull in of itself will have little impact, but what the Creditors report could be significant especially if the Borrower, had a late payment or maxed out a card.  But the opposite could also be true, if they lowered the balance on their credit cards during that time, and the Creditor reported it.
8:08pm • #75
JUN
01
319,713 Points 10 Featured Posts Outside Blog Called Shot Master

George, congratulations on this feature. We also advice our sellers to pull their credit if they expect to purchase another home after we sell their home. In today's new normal landscape of real estate, without knowing your buying power with a stamp of approval from lender, there is no reason to think you can purchase a home.
7:01pm • #76
JUN
02
776,033 Points 16 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

George, just had to come back again...this topic keeps coming up with clients...had this conversation twice today.
5:17pm • #77
JUN
08
1,552,323 Points 277 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp Called Shot Master

George- Great article worthy of a re-blog. 

Ron- #50- Can't you just move here to Florida to work with the buyers here? It was great speaking to you a few weeks ago. I am very impressed in your over delivering. We can not seem to find one mortgage broker here in our area who is willing to work for the customers. 
9:50pm • #78
169,865 Points Outside Blog Attended Rain Camp Called Shot Master

George-  I found your blog through Nestor and Katerina.  You hit this bullet point right one.  I get tired of hearing, I want to get pre-approved with you put don't pull my credit.  It's either the scare tatic or the client is afraid of their 500 score dropping more.   Best of luck to you!
9:57pm • #79
1,210,622 Points 118 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Came from Katerina's reblog.

I have seen cases where the mortgage brokers says they would do it, and then they say they couldn't and it is beyond the 14-day point.
10:10pm • #80
880,926 Points 10 Featured Posts Attended Rain Camp Called Shot Master

George, interesting to know that some buyers still feel it that way. Part of my buyer consultation does mention that it is REQUIRED that they get the pre-approval and yes, the lender will surely pull their credit. And good to know (from Katerina's re-blog) that it's a 14-day period...
10:38pm • #81
JUN
14
1 Featured Post Outside Blog

Great Info on issues with credit. Many people are unaware of this. Thanks for the info!
10:07pm • #82

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George Souto

Middletown, CT

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Address: One Liberty Sq., PO Box 1000, New Britain, Ct, 06050

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