Why does checking my credit score affect my beacon score and how to avoid this?

July 25, 2020

In terms of the pandemic response, Niagara Real Estate has remained pretty consistent. People are now getting out there a little bit more as we enter Phase 3 of this COVID pandemic.

Today, we’ve got a very special guest to address some of the questions people may have this week. Today we are going to try to answer every mortgage question you may have. We will be talking about mortgage insurance and anything to do with mortgages. Our special guest  on this episode of the Niagara Real Estate Show is Eric Sepper with Synergy Mortgage Group.

Eric Sepper will explain the difference between a mortgage broker and just going to a bank or going to a financial institution to get a mortgage?

The biggest differential between a bank and a mortgage broker is that the bank has one policy and one product for you. A mortgage broker like Erik Sepper, on the other hand, has the ability within their system ability to look at multiple institution and multiple policies to be able to see if there’s a good fit for that person and your mortgage. In other words, they can shop around for you to find the right mortgage. Each separate bank will want to do their own credit check to ensure that you are in line with their particular policies.

A mortgage broker has partners and relationships with multiple, local credit unions, banks, mono-line lenders, private lenders, whatever the situation is to be able to look and see what the best fit is for that person. The advantage of dealing with a mortgage broker is that they can do a credit check on the client and then he can shop around to all the banks and credit unions to find the right mortgage. So Erik is only doing one credit check, but if you go to two or three different banks, each bank will do their own credit check. Doing all of these separate credit checks actually hurts your beacon score.

So what is a beacon score? In the world of credit, if you continue to seek credit and continue to do multiple checks to the lender, it can hurt your score. The reason for that is because the lending institutions begin to wonder why you are seeking so much credit. They don’t know why or what’s happening and why you are shopping for credit.

So every time you have another credit check against your name, the credit Bureau reduces your credit score. There are apps etc that claim that they don’t affect your credit score but they may be doing a soft check which is not a deep dive and won’t pull up everything.

Please listen above for the full Niagara Real Estate Show. Need a mobile mortgage specialist? Contact Erik Sepper!



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