I often hear from buyers that they are concerned about shopping for mortgage rates because they don’t want banks to run their credit because each time that happens it can effect their credit score. Not necessarily So. Did you know that there is a soft credit and there is a hard credit check? So it is possible to rent an apartment and have your credit checked multiple times with no effect or a minimal amount as long as you do your shopping within a 45 day window. The amount of the drop or the number of days can differ from credit check company to company.
According to MyFico:
“Soft inquiries are all credit inquiries where your credit is NOT being reviewed by a prospective lender. These include inquiries where you’re checking your own credit (such as checking your score in myFICO), credit checks made by businesses to offer you goods or services (such as promotional offers by credit card companies), or inquiries made by businesses with whom you already have a credit account.”
Hard inquiries are inquiries where a potential lender is reviewing your credit because you’ve applied for credit with them. These include credit checks when you’ve applied for an auto loan, mortgage or credit card. Each of these types of credit checks count as a single inquiry. One exception occurs when you are “rate shopping”. That’s a smart thing to do, and your FICO score considers all inquiries within a 45 period for a mortgage, an auto loan or a student loan as a single inquiry. This same guideline also applies to a search for a rental property such as an apartment. These inquiries are usually recorded by the credit bureau as a type of real estate-related inquiry, so the FICO Score will treat them the same way. You can avoid lowering your FICO Score by doing your apartment hunting within a short period.
To continue reading My FICO, Hard vs. Soft Credit Checks
Please independently verify all information about credit checks. Information provided as a courtesy and should not be relied on without independent verification. I am not a credit counselor or credit expert.