The reason people are often told not to run their credit is to avoid excessive credit runs called "inquiries" diminishing their credit scores. It is possible to lose points temporarily from having excessive credit inquiries, but the key word here is "excessive" credit runs. Credit bureaus track the last ninety days of inquiries to determine if a credit fraud is being perpetrated against or even by someone. As the number of credit inquiries grows the credit score drops temporarily to limit credit availability and ward off fraud. You will not lose any points during normal shopping for a loan, car, credit card or mortgage unless you really go overboard with the shopping. The exact number of inquiries allowed every ninety days before scores drop is not clear as credit grading formulas vary by bureau and the bureaus also keep their grading formulas a trade secret. But, talking to a few legitimate companies while you're shopping and allowing them to give you accurate quotes by running your credit will make no difference in your credit.

Tags: credit points inquiries runs fico score

The Qualifying Process: What the bank needs to know to price your loan

By Matthew Killikelly

Borrowing money is different than other financial transactions in that the risk to the lender is ongoing so long as the loan exists. This means that the bank's profit margin is not calculated solely on cost to provide the borrower with the service less the cost of the product as in other purchases.

In the case of a loan the qualifications and history of the borrower, the amount of investment by the borrower and even property type and occupancy status of the property being collateralized are weighed to determine a unique risk profile for each loan. Every aspect of the transaction is carefully considered before a bank makes any solid offer for interest rate or closing fees.

Here are the factors considered by the lender in pricing your loan:

Transaction type-What are the customer’s needs?

Tags: mortgage qualifying loans banks underwriting income credit equity