Updated: Jan 26
Is it really necessary to pull credit? Will it hurt me?
TL;DR: Yes, it is necessary. And generally, no, it won't hurt you. But it can affect your score. However, if your credit is checked multiple times for the same reason (like getting a mortgage) in a short time frame (which ranges from 14-45 days depending on the credit scoring model), there is no impact to your score.
It is a very important part of the process.
In order to save you time, our online mortgage application does not ask you for details about your liabilities - that is, any debts you may have. In our experience, the credit report is more accurate and complete than most humans' memories are. Plus, it saves you time. When we pull your credit, we'll get all those details, and we can be the most accurate when providing you an assessment about your mortgage qualification.
But does it hurt me?
Each time a "hard" inquiry is run on your credit file, your credit bureau report will record the inquiry. The number of inquiries, how often they occur, and whether or not any new credit is extended, are all factors in calculating your score. It is misleading to say that a single credit inquiry will affect your score or hurt you. It is also misleading to say credit inquiries have no effect. Neither is true, and neither is entirely false, either. Like most things in life, moderation and responsible use will work wonders.
If you are a responsible user of credit, and pay your bills on time, your credit score is likely healthy. It can withstand the temporary and very minor reduction in your score, and it will not "hurt" you.
If you have multiple collections, a history of late payments, are maxed out on all your cards, and apply for (and take) new credit on a regular basis, then another credit check is probably not a great idea. For situations like this one, we recommend pulling your own credit using Equifax's online credit score report. This type of report is a "soft" inquiry, and will not affect your score.
To be able to give you an accurate assessment of what you qualify for, we need to know all of your outstanding liabilities. In order to give you a pre-approval, we will have to pull your credit ourselves with a hard inquiry.
Are there any exceptions?
Yes! Here's what Equifax has to say: "If you're shopping for some types of loans, such as a mortgage loan, multiple inquires for the same purpose within a certain period of time are generally counted as one inquiry. The time frames may vary, but range from 14 days to 45 days, depending on the credit scoring model being used. All inquiries will show on your credit reports, but generally only one within the specified period of time will impact your credit scores. This exception does not apply to credit cards."