Tracy Becker Credit Expert and Author

Credit Question

Q: What is the right credit score to order before buying real estate?

A: Most mortgage banks use a Fico score. This score can be purchased at myfico. Consumers can buy their Trans Union and Equifax Fico scores but cannot buy an Experian Fico score. Experian does not allow myfico to use the information updated on their bureau reports in the sale of scores to consumers. If both the Trans Union and Equifax Fico scores are above a 740 the consumer should be able to enjoy the best rates based on the credit score qualification of loan approval. Pulling your own credit reports at myfico will not hurt your credit scores.

If you have a credit or real estate question you can visit the ask.elliman website.

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Team Elliman

I am featured on radio show “Eye on Real Estate” twice a month with Dottie Herman, President and CEO of Prudential Douglas Elliman. If you follow me on twitter (@tracybecker) or are a fan of the North Shore Advisory, Inc fan page on facebook, I keep you posted on when I am on the show (usually Saturday mornings 10-Noon). If you listen to the show and have a credit question you can call in at 800-321-0710. And whenever you miss it, I feature the podcasts on North Shore Advisory’s press page (northshoreadvisory.com/press.html).

As part of Team Elliman, I am also a contributor to ask.elliman.com where you can type a question any time directly on the website and I or one of the other experts can help answer your questions.

In case any of you have the same questions, I am going to share with you the credit questions submitted:

Q:
I RECENTLY HEARD EVERY TIME YOUR CREDIT IS REVIEWED IT HURTS THE SCORE. PLEASE EXPLAIN HOW THIS WORKS AND WHAT IT DOES TO THE SCORE?

A:
Credit reviews are also known as inquiries or pulls. There are two kinds, the first is referred to as a soft pull and it does not affect the score. The second is a hard pull or inquiry and could drop the score up to 5 points each review.

Soft inquiries, which occur when consumers pull their own credit, receive an offer for a reduced interest rate promotional credit card, or have an insurance company review credit for policy approval, do not affect the credit.

Hard inquiries or pulls occur when consumers give authorization to a third party to review their credit during an application for most types of financing including mortgages, an increase in a credit card limit, new credit card approvals, and more.

While shopping for a mortgage, car, or student loan consumers have a window of time in which numerous inquiries will have a limited affect on credit scores. Most mortgage banks today use a 14 day window. If a consumer is shopping for a mortgage with a variety of banks it is wise to have them all pull credit within a few days of each other, limiting the damage to the score.