Applying for Mortgages Can Lower Your Credit Score

Posted On: December 15, 2005

Author: BRobertb
Posted: Tue Jun 08, 2004 11:44 am
Post subject: Applying for Mortgages Can Lower Your Credit Score

12/7/2002 1:16 pm CDT

I have searched for a 2nd mortgage for 90+ days to consolidate 35K. I tried E-loan was approved, but would only loan 25K. Next tried Countrywide. I was approved for a 1st mortgage only, but they wanted 13K in closing costs. Next went to New Century, again only a 1st mortgage. I was approved but rate was at 9% and would loan only 17K. Next I went to a mortgage broker, again only would do 1st mortgage. These rates were at 7.95% and loan was for 20K. Next I tried another mortgage broker. Same thing only will do 1st mortgage, same rate and also 20K.

In searching process my score has dropped about 70 points to 601. I never have any late payments, but I owe max amounts on credit limits.

Why is my score reducing because I am searching for a better loan? What can be done
about this?

12/16/2002 6:12 pm CDT

I am so sorry to hear about your drop in your score.
I know exactly what you are saying and it has taken me 2 years to get my FICO and CreditWorthy score back to the 700’s after several mortgage inquiries.
Fair & Isaac state that they can determine the difference in “shopping” best rates and do not fault us. WRONG!
They state that if a search for a new car or mortgage is done within 14 days, it will count as only 1 inquiry! That is what it says in print…………This simply is not true! You and I both know this. What has happened to you is totally unfair and has nothing to do with weather you are creditworthy or not…….but then it is a computer that is given info and spits out a score. Now, they think that possibly you were turned down by all of those mortgage lenders and “you must be a bad risk” How absurd this is!
I am sorry that this has happened to you.
I can only suggest that you go to a lender in person and explain your situation in person. You may have to pay a higher rate than someone with A+ credit, but you can work on paying it down as fast as you can. Amortization Sheets work very well.

12/17/2002 10:00 pm CDT

You are right about thinking I was turned down. I have decided to take one of the mortgages, but you’re right again about the high interest rate.

I wish there was a way to overcome the inquiries being a part of my credit score.

Thanks for the reply