In this last section, I will cover the tools and resources available to assist you with credit related issues. First, let’s touch on Soft and Hard Inquiries.

 

It is a snapshot of your credit score when it is pulled. With a soft pull, your scores are not protected and not useable for originating your mortgage. When you’re ready to move forward with an application a hard inquiry (or "pull") is done. The good thing about soft pulls is that they have no impact on your credit score and they do not generate an inquiry on your credit report.

 

A hard pull does have an impact on your score and can lower it by up to 3 points. It does create an inquiry on your credit report, but your score is protected for 90 days.

 

This means any activity on your credit report in the 90-day window will not affect your score as far as mortgage qualification goes. However, it’s important to note that the credit report itself is not protected, which means new accounts, payments and collections will show up on your credit report. Though they will not impact the protected credit score, they can adversely affect your qualification as they factor into liabilities and ratios such as DTI and cash to close requirements.

 

Greenway Mortgage uses soft pulls to not only prevent a 3-point hit to your credit score, but to protect you from becoming a trigger lead. When a mortgage lender (like Greenway) “hard pulls” your credit from any one of the three credit bureaus, your information is transmitted to them and your credit information is returned. What's concerning is that credit bureaus are selling the fact that you're shopping for a mortgage to other lenders...LOTS of them. Even though Greenway does not send your email or cell number, the bureaus use big data to ascertain both. Suddenly you're inundated with calls from many lenders.

 

I do not dissuade clients from shopping around, who you work with is up to you, but I would hope that you choose to deal with a trusted professional, not a telemarketer. The issue is that, until recently, there was no way around this. We must run your credit in order to determine qualification. Although we usually run only one bureau up front, we have to run all three once you have a loan in process. Every time we add another bureau, a new wave of trigger lead calls would hit.

 

Now that we have the option to a soft pull up front without generating an inquiry, this gives you time to get on the Trigger Lead do not call list at OptOutPreeScreen.com before we have to do a hard pull.

 

Be sure to check out all of my online resources including videos, podcasts, and downloadable materials. It all starts with my mobile app. Click here to download it today!

 

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Did you miss Part 1 and Part 2 of this three-part blog series on Understanding The Credit Landscape? Catch up on Part 1 here 2 here: