When you apply for a mortgage your lender or mortgage planner will almost always check your credit. Most Canadian lenders use Equifax for this purpose.
Here are a few things you may or may not know about the process:
When a bank or mortgage professional initially checks your credit score, your score goes down.
According to a source at Equifax, your score can drop anywhere from roughly 5 to 20 points on the first mortgage inquiry.
After the first inquiry, a 30-day clock starts ticking. During this time you can have multiple mortgage inquiries without negatively impacting your score. But there’s a catch.
The person making the inquiry MUST use Equifax’s “mortgage code” when requesting your credit score. (If you’re a mortgage professional you can tell if you’re using the right code by checking if “FM” is in your Equifax member number. )
Mortgage planners from all the big broker firms use the mortgage code.
Big banks may or may not use the mortgage code, according to the Equifax rep we spoke with.
Factoid: When a lender or mortgage planner pulls your credit, he/she sees your credit score before the impact of that inquiry. The next person to check your credit will see a different (lower) score because the first mortgage inquiry will have reduced it.
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