Three Ways To Protect Your Credit When Mortgage Shopping

As mortgage rates continue to fall in California, mortgage application activity has soared through the roof. According to the Mortgage Bankers Association, the number of applications shot up 48 percent. Refinance applications saw an increase of 62.6 percent, while purchase applications rose 17.7%. But, as 30 year fixed mortgages near the 5 percent marker, consumers ought to be careful when they go mortgage hunting.

Here are three ways you can protect your credit [FICO score] while trying to take advantage of these historically low mortgage rates.

Limit the Amount of Mortgage Credit Inquiries

Although it’s smart to shop around for your mortgage, it’s best not to pass around your social security number as freely. Aside from identity theft issues, providing your social security number to too many people could result in having your credit history pulled more than you like. Unfortunately, the credit bureaus take notice of these multiple inquiries and often ding consumer’s credit scores by a few points.

Shop Around in a Timely Fashion

Different mortgage lenders and different mortgage brokers operate in their own ways, but one common practice is that they’ll ask to pull your credit history. Aside from your social security number, you’ll want to keep your eye on the calendar and keep track of your mortgage timeline. Credit bureaus are likely to excuse multiple inquiries if they are within a reasonable time period (2 to 4 weeks). As an example, having four credit inquires in one month is preferable to having one credit inquiry each month for four months.

Get a Copy of Your Credit Report

To avoid the hassles of sharing your social security number and multiple inquires; get a hold of your credit report as soon as you can. Most lenders and brokers are interested in seeing your recent credit score on paper. With your own credit report on hand, you can provide them this information without having to deal with another credit inquiry. Keep in mind that when you finally choose your mortgage lender, they’ll likely have to pull their own credit report for authentication purposes.

While mortgage rates are certainly attractive, keep these tips in mind because keeping your credit in tact is more important than ever.