There is a lot of confusion about the way multiple credit checks affect your credit rating. Not just amongst the general public but also people in the industry. I have spoken to mortgage lenders, mortgage brokers, leasing specialists and car loan professionals. And they have different answers to this question.
Luckily I was able to speak with a regional manager at Equifax at a recent lender/broker event to clear this up. With recent technology implemented, Equifax now should know if the credit check is for a mortgage or a credit card. For mortgage inquiries, checks within a period of 1 to 4 months are counted as one. The time depends on which Equifax credit score you are talking about. Equifax have several versions of their credit scores.
It used to be that if you go to a bank, each credit check would be counted as one, because the system cannot tell what it is for. It only knows it came out of a bank. If it went through a mortgage broker, the system knows it is for a mortgage. But now there are codes that separate mortgage inquiries from credit card applications. How it is implemented in each bank is not known. It maybe set up on different systems or maybe the employee has to punch in the right code but as long as things are done correctly, there is no more fear of hurting your credit by shopping the banks yourself.
But note recently I have heard a story from a client who said the checks at the bank hurt their credit score. So maybe it will take a while before it is uniformly implemented at each bank.
However, if you have read any other articles in my blog, you will see that there are very few reasons why you would go to a bank for a mortgage in the first place. And the free service of a mortgage broker seems like an obvious better choice especially when you take into consideration all the pitfalls of getting a mortgage through a bank.
Alternative lending.ca help people with difficult situations get financing and people in good financial situations get better financing through non-bank lenders. We operate out of Vancouver, BC, but can assist people in all of BC and selected locations in Alberta, Manitoba, Saskatchewan and Ontario.
