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Most financial institutions don't want you to know that soft inquiries or "second looks" can make or break your mortgage, but the truth is that anything you do financially between first approval and finalization can change the outcome of your application.
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Most financial institutions don't want you to know that soft inquiries or "second looks" can make or break your mortgage, but the truth is that anything you do financially between first approval and finalization can change the outcome of your application. Now, although soft inquiries won't affect your credit, they will reveal anything that has gone on in your bureau since you first applied. This means that recently defaulted payments or new lines or credit revealed during these soft inquiries could potentially prevent you from getting the mortgage you want, or the rate you were initially quoted. So, if you’re still shopping around what kind of hard inquiries should you avoid?
Purchasing a vehicle Financing a vehicle is a bad idea both for the hard inquiries that will appear on your bureau and the new trade line that will be opened (both of which affect credit score).
Excessive charging While you may be tempted to furnish your new house on credit, taking your cards to the limit lowers credit score and tells your lender that you can’t handle any more debt.
Missing payments If you can't pay your phone bill, you probably can't pay your mortgage. While you should never miss payments regardless of if you are mortgage hunting or not, missing payments before finalization will give a bad impression during soft inquiries.
Taking out a new line of credit If you are offered a pre-approved credit card before you sign, don't take it. Remember, your lender assumes that if you can spend, you will spend, and even if your new $3000 credit card is empty, you now have additional hard inquiries that you may need to remove with the help of Inquiry Busters, and are also $3000 riskier.
Cancel an existing line of credit Maybe you have an old card you don't need, you've had it for years and don't use it anymore so you decide to cancel it- big mistake! Regardless of if you don't use the card regularly, it contributes to your overall credit score and proves that despite having access to credit, you haven't used it, and can be trusted to handle your debt responsibly. In short, if it involves credit – don’t! Always wait until your mortgage is finalized first.
