topic Re: Limit number of inquiries one can do in General Credit Topics

Limit number of inquiries one can do

Anonymous — Fri, 08 Apr 2022 14:14:15 GMT

I have just refinanced my mortgage. My credit score went from over 720 to 663. Mostly because the broker did over 10 credit inquiries in the process. Nobody tells you that this will happen, how would I know the broker would do so many inquiries? Shouldn't all those count as one? Is there any other way to refinance a mortgage? How can this scoring system be so imperfect that it doesn't realize things like that? And no way to complain or repair what definitely does not reflect someone's real credit history? That's disturbing and unfair.

Re: Limit number of inquiries one can do

Remedios — Fri, 08 Apr 2022 14:30:58 GMT

Hello and welcome

Inquiries for mortgage when done is certain period of time and proplerly coded will be bundled and scored as one. They are still visible as individual HPs, but scored as one.

I don't know why your lender didn't tell you how many pulls they will perform, that's up to them, not scoring algorithm.

Also, if pulls were done by various lenders because you were shopping for a good rate, you should have known they would result in separate pills.

In any case, you got a better rate, you will recover points lost for HPs in a year, they will be gone in two years. Small price to pay to save tens of thousands of dollars

Re: Limit number of inquiries one can do

dragontears — Fri, 08 Apr 2022 14:46:04 GMT

@Anonymous wrote:
I have just refinanced my mortgage. My credit score went from over 720 to 663. Mostly because the broker did over 10 credit inquiries in the process. Nobody tells you that this will happen, how would I know the broker would do so many inquiries? Shouldn't all those count as one? Is there any other way to refinance a mortgage? How can this scoring system be so imperfect that it doesn't realize things like that? And no way to complain or repair what definitely does not reflect someone's real credit history? That's disturbing and unfair.

10 inquiries did NOT drop your scores 60 points. Either you are looking at non-FICO scores or something else happened to your profile.

Re: Limit number of inquiries one can do

Anonymous — Fri, 08 Apr 2022 15:47:35 GMT

The thing is, I wasn't the one shopping for a rate. The broker did it and never gave a hint of how many inquiries would be done. In any case, I doubt these kinds of rules help in any way to get a fair credit rate. It only helps lenders push for higher interest rates. I think it's past the time for our legislators to take notice of what is being done in the credit scoring system. It's definitely a roadblock in the way of our economic development. Fixing it would do more good than eliminating taxes for individuals or creating incentives to promote growth. Well, thanks for your help.

Re: Limit number of inquiries one can do

Anonymous — Fri, 08 Apr 2022 15:55:02 GMT

True, sorry for that, it was Creditwise, I have just realized that. But it went from 745 to 699 in Fico, probably not just because of the inquiries, but it has something to do with the refinancing, because it was right after it. Would it be paying off the old mortgage by the new lender the reason?

Re: Limit number of inquiries one can do

bigseegar — Fri, 08 Apr 2022 16:52:36 GMT

@Anonymous wrote:
True, sorry for that, it was Creditwise, I have just realized that. But it went from 745 to 699 in Fico, probably not just because of the inquiries, but it has something to do with the refinancing, because it was right after it. Would it be paying off the old mortgage by the new lender the reason?

Yep, for two reasons. 1) New credit line reporting 2) that new credit line reporting at 100% UTL in the beginning. Scores will rebound in time from both of those. As said very well worth it if you saved thousands.

Re: Limit number of inquiries one can do

Anonymous — Fri, 08 Apr 2022 17:02:04 GMT

Thanks for clarifying that. But isn't the system broken if it does this sort of thing? Shouldn't it be smarter and see what's going on, instead of penalizing who's doing something to save thousands? How's that an indication of bad credit, or that that person should have a drop in the score?

Re: Limit number of inquiries one can do

Remedios — Fri, 08 Apr 2022 17:30:34 GMT

@Anonymous wrote:
Thanks for clarifying that. But isn't the system broken if it does this sort of thing? Shouldn't it be smarter and see what's going on, instead of penalizing who's doing something to save thousands? How's that an indication of bad credit, or that that person should have a drop in the score?

Smarter how?

By that logic there shouldn't be any hard pulls

Not for cards because we' re trying to earn rewards and shopping for best rate.

Not for auto loans because you're just shopping for best rate

Not for personal loans because one didn't like the rate

Not for SL because people need to go to school.

System will count them as one scoring wise, as long as they are coded properly and done within allowed period of time. That's the fix, it is smart enough to recognize rate shopping .

There are a few things scoring algorithm didn't get quite right (according to me), but this isn't one of them.

You saved money, you have inquiries that will disappear. It's not like one applies for mortgage or refinance every three months.

If you are rely that worried about HPs, you'd want to talk to lender and see why so many were done, though there is nothing unusual about that number inquiries related to mortgage refi, especially when one is close to better/worse rate tier

If you are worried about lost points, you will get some back when new mortgage reports. In the meanwhile, enjoy saving money you'd be paying in interest had you not done refinancing.

Also, 720 is on the low side for clean profiles do either you have negative items or high utilization. Working on either could possibly get you additional points.

Re: Limit number of inquiries one can do

Anonymous — Fri, 08 Apr 2022 18:32:31 GMT

What I'm saying is that shopping for better rates when there is no other option while refinancing shouldn't be a reason to downgrade a score, if it is supposed to be a measure of how trustworthy one is. Same with refinancing, there must be a way to show that one mortgage was paid off, another takes its place, with a lower rate -- how does that make someone less capable of paying it? If that can't be detected automatically, maybe an extra step needs to be created. Also the same with paying off car financing, the temporary drop in one's score does nothing in terms of reflecting a real change in one's trustworthiness, quite the opposite. As for my score, I still have too much revolving credit from credit cards that I've been frantically paying since I got out of the irregular hourly contractor jobs a year before starting the refinancing process, and student loans for my wife and kids -- all going according to the plan, though, these debts should only go down now. Thanks for your help.

Re: Limit number of inquiries one can do

SouthJamaica — Fri, 08 Apr 2022 22:07:50 GMT

@Anonymous wrote:
I have just refinanced my mortgage. My credit score went from over 720 to 663. Mostly because the broker did over 10 credit inquiries in the process. Nobody tells you that this will happen, how would I know the broker would do so many inquiries? Shouldn't all those count as one? Is there any other way to refinance a mortgage? How can this scoring system be so imperfect that it doesn't realize things like that? And no way to complain or repair what definitely does not reflect someone's real credit history? That's disturbing and unfair.

In fact multiple inquiries in connection with a mortgage are aggregated into a single inquiry by the algorithms, if they occurred within a 2 week period.

Re: Limit number of inquiries one can do

SouthJamaica — Fri, 08 Apr 2022 22:15:46 GMT

@Anonymous wrote:
Thanks for clarifying that. But isn't the system broken if it does this sort of thing? Shouldn't it be smarter and see what's going on, instead of penalizing who's doing something to save thousands? How's that an indication of bad credit, or that that person should have a drop in the score?

I'm not here to defend the FICO algorithms, or the "system", but no, your particular experience does not in the least support the view that the system is broken. Your experience shows that a person who trades in a partly paid off mortgage for a 100% unpaid mortgage is going to experience a dip in scores. And I doubt the dip will be as great as the one you are reporting to us. I have a hunch that when the dust settles on the 2 transactions your point loss will not be as severe as it is today.

Re: Limit number of inquiries one can do

tnhomestead — Sat, 09 Apr 2022 03:39:02 GMT

You forget you don't need to use fico. There are mortgage companies that still use manual underwriting, you just have to look. I get dinged for having a paid for house and car. According to fico, that's a bad thing. Having all your cards at zero is also bad. Finances before fico. Your score will recover soon. And sorry, life is not fair now, never has been and never will be. If it was, I would be good looking, rich and a foot shorter so I could git in my new vette!

Re: Limit number of inquiries one can do

805orbust — Sun, 10 Apr 2022 22:02:02 GMT

@Anonymous another important point to remember is that this is all bs... like on a colossal level. Yes lenders do want to know that you will honor your obligations to them (so credit scores should be above a certain level), however they DEFINITELY want to squeeze every bit of interest out of you. (So a "high score" but not too high) There's always someone here in the 800's yapping about being turned down for this or getting a low limit on that. Point being the game is not rigged for your benefit, it's rigged for theirs.

Ponder the recent rise in Mortgage rates after a relatively small increase in interest rates by the Fed... there are literal bucketloads of cash being made by the banks right now. Anyone who was loving those stimulus checks are hearing the sound of the other shoe dropping. 🤣

I bet banks LOVE to see us right between 620 and about 679. They clean up in that range and the customer is just happy to be approved. I try not to lose myself in this. Other than a Mortgage or car note, I only apply for credit when I do NOT need it. Amazes me how that works so well.

Re: Limit number of inquiries one can do

SDMarik — Mon, 11 Apr 2022 12:23:20 GMT

As others have said, they likely are only reporting as one. On the chance they all DID report individually, you might be able to reach out to the bureau to discuss. If the broker was shopping around with a bunch of different lenders, they might have wound up with many different pulls. However, unless you have a really thin file you should recover from this quickly.

I purchased a new car last year, and when I checked my report I saw 6 inquiries from the dealership but they only socred as one. My score dropped 10 points total (between the inq and the new loan bumping up my installment utilization) but I recvoered in 3 months.