Will lot of inquiries hurt my chances to get a mortgage?
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I’ve recently applied for a car loan, and now I’m worried that all these inquiries will hurt my chances of getting a mortgage (I plan to apply 6 months from now). Will they?
Rate shopping counts as only one inquiry
There are three separate issues here. To start with, Fair Isaac (the company that created Fico) recognizes the importance of rate shopping. Fico formula allows for rate shopping without it hurting your credit score.
When you shop for a car loan, student loan or a mortgage, all inquiries made in a defined period of time (45 days in the new Fico formula and 14 days in the old one) count as just one inquiry in your Fico score. That way when you shop for better rates you don’t hurt your score. This however doesn’t include credit cards, personal loan etc. See rate-shopping-and-credit-scores.html for more information.
Second – one, two or even three inquiries a year will have a very small impact on your credit score. However, once the Fico formula recognizes too many hard inquiries, it will drop you score significantly, and add a comment about you having too many hard inquiries in the past 24 months. There is no pre determined threshold at which this occurs. It is different for each credit profile (See credit-report-inquiries.html for more information).
Lastly, remember that credit scores plays only a small part in the lending decision. Lenders (especially mortgage lenders) look at your actual credit report. Also remember that the car loan will be included in your total debt to income ratio, and may make it difficult for you to get approved regardless of your score.
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