From a Speaking of Credit reader….
By Barry Paperno
Dear Speaking of Credit,
What is the best way to shop for a mortgage without getting too many hard inquiries?
Before you start, get your reports and FICO mortgage scores (Experian 2, Equifax 5 and TransUnion 4) from myFICO.com — the exact same scores most mortgage lenders use that are only available there. They will cost you about $60, but the inquiries won’t affect your score and you’ll know where you stand with lenders.
Then confine your mortgage shopping to about two weeks if at all possible, as any number of hard inquiries incurred during that time will only count as one inquiry in the score. Some score models give you 45 days, but two weeks will keep you safe. If you happen to generate one or two more later, though, don’t fret, as the typical inquiry only affects your score by about 5 points.
Will having student loans in forbearance while getting a mortgage help or hurt my score?
Loans in forbearance will neither help nor hurt your score. Though it can be argued that by simply not hurting your score you’re helping it.
Keep in mind, however, that any late payments prior to forbearance can continue to do damage to your score. Also, the mortgage lender may disapprove (apart from the score) of the forbearance or require an explanation of the circumstances leading to it.
How can you identify companies that use soft inquiries as opposed to hard inquiries?
Soft inquiries will usually be listed on a credit report as those pulled for promotional, account review, consumer disclosure, insurance and other purposes. These usually appear separately from the hard inquiries that result from applications for new credit.
Hope this helps!