Bill Arnott
December 2023
Service Beyond The Expected

Are Multiple Loan Queries Always a Problem?

A loan query as it relates to mortgages refers to the act of someone or some company that applies for a new loan. On its face there's nothing really derogatory about that. After all, consumers apply for new loans every day. Some might make an application but decide they didn't want the loan after all.

First, there are two basic types of loan queries- a hard query and a soft query. What's the difference? A hard query is a direct request by a consumer or a company to view a credit report. A soft query is one where a credit company, often a new credit card, runs a soft query when deciding whether or not they want to extend to you an offer for a new credit card. 

A soft query won't bother credit scores whatsoever. But a hard query, or rather multiple queries, can. When someone begins shopping for a mortgage and makes an application, that's a hard query. But shopping around will log multiple queries on a credit report. But shopping around for a mortgage around the same period of time will be treated as a single query, even if someone makes an application with several mortgage companies. As long as the queries are for the same loan during a specified period of time, they will be treated as a single query. No harm, no foul.

Queries can be an issue however when there are multiple queries over an extended period of time. For instance, someone has a credit card account. The consumer charges things and pays them off all at once or spreads them out over time. Again, no harm, no foul. Suddenly, the consumer makes multiple requests for different types of credit. Say a new credit card or a gas card. Maybe a new installment loan. When multiple queries appear for different types of loans, it could indicate to the potential lender that the consumer has suddenly fallen into some sort of financial trouble.

However, several loan queries for the same type of credit during a specified time frame, say 30 days, there will be no hit to a credit score and the potential lender will ignore these queries. 

One final note, be prepared to respond to a lender if you've applied for a credit account but have not taken one out. If a loan query pops up, the lender won't know for at least 30 days whether or not there is a new balance. Credit companies don't report to the credit bureaus every day but once every 30 days. If there is a new query with no balance showing, the lender will need a little more information.

Bill Arnott, Principal Broker, M.Ed. FFLDF
Local: 603.313.6884
New Century Real Estate
Direct: 603.313.6884
44 East Surry Rd.
Keene, New Hampshire

Equal Housing Opportunity