Monday, July 12, 2010

Will Fannie Mae's New Requirement to Pull a Second Credit Report Lower Your Score?

Now that Fannie Mae "recommends" that all lenders pull a new credit report right before closing (meaning "do it or else we won't buy the loan"), there is much concern about whether the extra credit pull will lower a borrower's credit scores.

The short answer is NO, provided the report is "refreshed" and not just re-pulled as a new report. A refreshed credit report is considered to be a "soft" credit pull, which does not impact a borrower's scores. A "hard" credit pull occurs when someone applies for new credit and that may impact the scores.

Again, if the credit report is just being refreshed, and not being pulled again as a new report, then it will not change the credit scores.

Also, keep in mind that multiple credit pulls by a mortgage lender within a 14-day period only count as one credit pull, even if different lenders pull the credit. If a lender tells you or your buyers that you shouldn't shop around for a mortgage because it might lower your credit scores, find a new lender because the one you have is not very knowledgeable.

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