Your credit inquiries are judged by:
- number of inquiries
- purpose of inquiry
Your total number of credit inquiries made in the last 90 days usually shows up on your credit report. This includes the name and credit of the creditor that checked your credit.
A potential borrower who has checked their credit too much recently may be a red flag for mortgage lenders.
Most borrowers usually don't need that much new credit in a short time frame.
Purpose of Inquiries
Having your credit checked for credit card applications is different than having your credit checked as part of a mortgage application.
If you go out and apply for 10 different department store cards you may have a large amount of new credit lines approved. Although the balance may initially be zero this represents the ability of the borrower to increase their debt load over time (or even all in one day).
The more available credit a borrower has on credit cards the more potential debt that borrower may take on. This represents a potential risk to a mortgage lender.
Having your credit checked a few times for a mortgage application is different. Lenders know that you are applying for only 1 mortgage even though your credit may have been checked for mortgage applications by 5 different lenders. It is not the same as 5 credit inquiries to have 5 different credit cards.
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