Credit is where most of the fear lives, and most of it is misplaced. What actually moves the needle, what does nothing, and what quietly costs you the approval.
Before the mortgage side, I sold over 1,000 homes here in the Capital District. These answers come from someone who has sat in the agent’s chair at the closing table — not a banker reading you a policy manual.
Shopping is smart, and the scoring models are built for it. FICO and VantageScore treat multiple mortgage inquiries pulled inside the same shopping window as a single inquiry, so comparing two or three lenders costs you essentially nothing on your score.
What actually matters is the window. Newer FICO versions use a 45-day window; some older versions still in use run 14 days. Because you can’t control which version a lender pulls, the safe move is to do all your shopping inside 14 days.
The real risk in applying with several lenders isn’t your credit — it’s duplicated effort and appraisal money. An appraisal fee paid to one lender doesn’t transfer, so shop rates and terms first and only order an appraisal with the lender you’re going to close with. Ask each one for a Loan Estimate and compare page 2, not the rate someone quoted you over the phone.
#As many times as the file requires, and on most loans it happens at least twice: once at pre-approval, and once more shortly before closing.
That second pull is the one that surprises people. Fannie Mae, Freddie Mac and FHA all require the lender to re-verify that nothing changed before the loan funds — so a credit card you opened for furniture, a car you financed, or a new collection that posted after pre-approval can all show up days before closing and change your debt ratio. I’ve seen approvals come apart over a $400 monthly car payment taken on in week three.
Both pulls are the same hard inquiry type, and because they’re from the same lender on the same file they don’t compound against you. The rule is simple: from application to keys, don’t open, close, or finance anything without telling me first.
#Barely, and far less than most people fear. A single mortgage inquiry typically costs fewer than five points, and all mortgage inquiries in the same shopping window count as one. FICO also ignores mortgage, auto and student loan inquiries entirely for the first 30 days, so shopping this month doesn’t affect a score pulled this month.
The effect is also temporary — hard inquiries stop affecting your FICO score after 12 months and drop off the report entirely after two years.
The thing that genuinely costs you money is not shopping. A quarter-point difference on a $300,000 loan is roughly $45 a month, every month, for 30 years. A handful of score points is not worth protecting at that price.
#Appraisal, title, taxes, prepaids, and lender fees. They vary by loan and town, and a seller credit or the right program can offset a real chunk of them.
You'll get a clear, itemized estimate up front — not a friendly “ballpark” that quietly grows three thousand dollars by closing week. Start with the Number Crunch calculator for a first look.
#Not at the pre-qualification stage — that's a soft pull, which never touches your score. The full tri-merge at pre-approval is a hard inquiry, but the effect is small and temporary, and rate shopping inside a short window typically counts as one.
What actually hurts: applying with five lenders at once to see who's cheapest, then opening a furniture card and running up a balance mid-process. Shop the person, not the pop-up ad. If you want the score higher before you apply, that's the Credit Game Plan.
#Yes, and this is a large share of what I do. Real-life credit — medical collections, a rough stretch, a thin file, a score in the 500s — has programs built for it.
A “no” from a big lender usually means their one program said no. It is not a verdict on you. Browse Loan Programs, and if the score needs work first, the Credit Game Plan is the honest starting point.
#Only if your total collections balance is $2,000 or more. Below that, they can be ignored entirely.
Full breakdown: Credit challenges →
Source: HUD Handbook 4000.1
#Non-mortgage charge-offs are excluded from your DTI calculation and don't need to be paid off — they generally don't block an FHA approval.
Full breakdown: Credit challenges →
#If disputed derogatory accounts total $1,000 or more, your file gets automatically downgraded to a manual underwrite. Disputes older than 24 months or from identity theft are exempt.
Full breakdown: Credit challenges →
#Conventional generally starts at 620. FHA goes to 580 with 3.5% down, and guidelines allow 500–579 with 10% down. VA and USDA set no hard minimum, though most lenders want 580–640.
Individual lender overlays are why the same borrower hears three different answers from three different lenders. Mine is not the strictest list in town.
Source: HUD Handbook 4000.1 · Fannie Mae Selling Guide
#Get each card under about 30% of its limit, stop opening anything new, never close an old account, dispute genuine errors, and pay everything on time. Thirty to sixty days of that moves most scores meaningfully.
The Credit Game Plan tells you which of those matters most for your specific report instead of guessing.
#Paying balances down usually helps twice — your score rises and the minimum payment leaves your debt-to-income. Just do not close the accounts, and do not spend your down payment doing it.
#Sometimes. It removes the payment from your ratios, but it also spends cash you may need to close. We run it both ways before you touch the loan — often the car payment costs you less approval than the missing reserves do.
#Two ways: the minimum payment counts against your debt-to-income, and the balance-to-limit ratio drives a big chunk of your score. A card at 90% of its limit can cost you real points even when you have never missed a payment.
#Often yes. FHA and several portfolio programs allow a manual underwrite using alternative credit — twelve months of rent, utilities, phone, and insurance paid on time. It is more paperwork, not a dead end.
#Usually yes. FHA excludes medical collections from the collection-balance rules, the newest scoring models ignore paid and smaller medical collections entirely, and underwriting generally treats them differently than consumer debt.
Source: HUD Handbook 4000.1
#Often yes, with a written IRS payment plan, proof you have made the payments, and the monthly payment counted in your ratios. A recorded tax lien is the harder version — it usually has to be paid or subordinated.
Source: IRS · HUD Handbook 4000.1
#Yes. Most buyers I work with have them; they are just another monthly payment in the math.
#If you have a real payment, that payment is used. If you are deferred or on a $0 income-driven plan, conventional and FHA generally use about 0.5% of the balance as a hypothetical payment — which is why the program you pick can change your approval by a lot.
Source: Fannie Mae Selling Guide · HUD Handbook 4000.1
#Not while they are late. Recent 30- and 60-day lates, especially in the last twelve months, are the hardest thing on a file to explain away. Bring them current, wait for the reporting cycle, then we go.
#Creditors usually report once a month, so 30 to 45 days. If we are mid-file and need it faster, a rapid rescore can update it in days with the right documentation.
#No. Please, no. Your credit is re-checked right before closing, and a new account can change your score, your ratios, and your approval — days before you get keys.
#No, and this one kills more loans than anything else on this page. A $600 car payment can take $90,000 off what you qualify for. Buy the car the week after closing, not the week before.
#No new credit, no financed furniture, no car, no job change, no large unexplained deposits, no emptying the account we documented, and do not co-sign for anyone.
If something unavoidable comes up, call me first. Almost everything is manageable in advance and almost nothing is manageable the day before closing.
#Fifteen minutes, no credit pull, no application, no pitch. Worst case you learn something and I don’t get your business.
Brian Marchand · Sr. Loan Consultant, New American Funding · NMLS #481563
Works on credit and qualifying for buyers and homeowners in Albany, NY and the Capital Region. Licensed in New York State. New American Funding, NMLS #6606 · 18 Computer Dr E, Suite 103, Albany, NY 12205.