Bank loans and Inquiries

[Nicholas Hamblen]

Hi Everyone,

I was driving to work this morning listening to the new podcast. They were talking about if one bank denied you, then go to the next and so on and so on. I am a newbie, trying to figure out my options for obtaining money, and was very motivated by this. I was just curious on, how you can get denied so many times and not have it affect your credit score with inquiries? I love the idea of don't take no for an answer, but I also want to be responsible with my credit. Is there a strategy to this? My experience is a lender will tell you anything you want to hear so they can pull your credit report.

[Chris Mason]

Originally posted by @Nicholas Hamblen:

Hi Everyone,

I was driving to work this morning listening to the new podcast. They were talking about if one bank denied you, then go to the next and so on and so on. I am a newbie, trying to figure out my options for obtaining money, and was very motivated by this. I was just curious on, how you can get denied so many times and not have it affect your credit score with inquiries? I love the idea of don't take no for an answer, but I also want to be responsible with my credit. Is there a strategy to this? My experience is a lender will tell you anything you want to hear so they can pull your credit report.

 Hi Nicholas,

A few things:

1) Mortgage inquiries are not treated the same by the FICO algorithm as credit card inquiries. The exact algorithm is a trade secret, but it makes sense... someone inquiring about a bunch of new credit cards a month is probably on a downard spiral, but someone looking to buy real estate is probably doing quite well financially. Credit reports reflect the type of institution that ran your credit.

2) You should be able to zoom in on the crux of the issue on the phone before getting to paperwork if your scenario is truly that wonky. "So-and-so, doing Fannie loans, said they wouldn't lend on three parked RVs as if it were a triplex. Will you lend on three parked RVs?" - not so hard, and on my end as a lender I certainly don't want to spend time analyzing your tax returns and credit report if you want something that I don't offer (once this was identified, I'd refer you to someone that might be able to help), so everyone wins.

3) Counter to number 2, there are still situations where paperwork is needed. Like if you're self employed and don't have every line of your tax returns memorized, then yup paperwork is needed.