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Losing Credit! |
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| A key rule for homebuyers: Don't do anything that would
hurt your credit score. But a lot of savvy Internet users hurt their credit
scores inadvertently because the act of applying for a
mortgage can, by itself, lower a borrower's credit
score, and applying is easy to do online. A loan inquiry
raises a red flag to lenders, suggesting a possible
financial problem, and multiple loan inquiries
automatically lower a credit score if done over a period
of time. |
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| To offset problems for mortgage shoppers, most
credit scores ignore multiple mortgage applications
submitted within the 30 days prior to a credit check
because they assume people will shop around for the best
rate. Beyond 30 days, credit scores will consider
mortgage inquiries as separate events within each 14-day
period. Anyone who shops for a loan for three months
could find themselves getting offers and interest rates
that are progressively less attractive. |
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Best advice for buyers |
| Use the Internet for research but only apply for a
mortgage when you're ready to make a commitment, apply
to a handful of companies, and make a decision within 30
days. |
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