My first convetional 30 year loan

6 Replies

Hey peeps.

I recently found a deal I wanted to conventionally finance it. I asked my agent to give me a lender, and he gave me 3.

Me, not really knowing what I'm doing I asked for a pre-approval from all 3 of them.

There was a few surprising things:

1) My credit rating was actually lower than what credit carma, and bank of America (Fico score) shows. Those apps show 767 or something. What came on a paper was 747. What gives? Even now, a few weeks after the fact. Credit carma still shows it higher, than what came on those papers from those lenders.

2) Now one of the the credit tracking company (Equifax) shows 3 additional inquiries. All three done on the same day (19th of January) but strangely enough all three done by the same company (Something like 'Credit plus'). My only explanation that all 3 lenders use the same company for doing hard inquires.

Even stranger Transunion shows only one hard inquiry.

So a few questions:

Was it a mistake to ask to be per-approved by all three?

How come Transunion only shows 1 hard inquiry, while Equifax shows 3? Will this even out in the future? 

Will it even out to 1 or 3?

I remember watching a Phil Pustejovsky's video where he advises people to go "shop for a loan". he claimed you won't get the hard inquiry hit if you do it in a short amount of time (credit companies will treat it as one). Was that BS?

Thank in advance

I am not a broker but have 4 conventional loans. What I have seen is that sometimes during pre-approval, lenders can run your credit against just one of credit agencies or they pick the lowest score out of all three agencies. Credit card companies or banks usually have ties with own of the credit union. Hence, you would see the discrepancy between scores provided by BOA and lenders. Usually, the difference should be minor and shouldn’t affect how much you are able to borrow and the percentage of interest rate you will be able to get approved for.

Good luck, @Milos N.

@Milos N.

Credit Karma only uses one credit bureau.

Banks don't calculate FICO the same way. There will usually be a difference. Most of it is due to the way FICO weights various credit history points vs. the way Credit Karma does it.

When you are shopping for a mortgage, the lenders know that and ignore it on the credit history. So, shopping within a short period of time doesn't affect your preapproval.

Your standard credit score will always be higher than your mortgage score, if you call one of the 3 reporting agencies, they can explain this  to you in  greater detail. Also take into consideration if it was a soft or hard pull. When shopping for a lender you shouldn't have all of them pull your credit. They should be able to run estimate numbers off of that days rates to provide you with enough information to see what lender will work best for you.

@Chris Mason is from your area and is the most influential person in the section you posted this post on. I would reach out to him with any questions if you are trying to link up with a local lender. Check the top right of the page.

In regards to applying for a conventional 30 year mortgage. A large majority of the lenders will take the middle score of all three credit reports. As long as your credit score is 740 or above, it won’t matter. So whether you have a 747 or and 817, it doesn’t matter. It doesn’t affect, what’s known as, credit risk score pricing as long as you’re 740 or above. When you drop down below 740, they’re will be a slight hit to your credit risk score pricing. Keep in mind that credit karma is a free service, and you’re not going to get the most accurate information from them. Shopping around is always suggested, but you’ve got to have the proper knowledge in order to make the most educated educated decision. 

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