as far as i know, this changed several years ago giving buyers the opportunity to shop around. As long as you are doing it all within weeks of each other, it shouldnt negatively affect your credit. From what I understand, these "hits" are really insignificant with a point or two, not 10 or 20.

We just closed on our house yesterday and we started this journey in Feb of this year. We ended up with 6 hits on our credit report, 2 from a vehicle purchase. When we chose a lender all we had to do was fill out a paper stating what the hits were for, it didn't hurt our credit more than a few points.

I was told you have 40 days to "shop around" for mortgages and your credit would not take a hit. I'm not sure if this is new or even true ...

"When you apply for credit, you authorize those lenders to ask or "inquire" for a copy of your credit report from a credit bureau. When you later check your credit report, you may notice that their credit inquiries are listed. You may also see listed there inquiries by businesses that you don't know. But the only inquiries that count toward your FICO Scores are the ones that result from your applications for new credit."

From myfico.com

How much will credit inquiries affect my score?

The impact from applying for credit will vary from person to person based on their unique credit histories. In general, credit inquiries have a small impact on one's FICO Scores. For most people, one additional credit inquiry will take less than five points off their FICO Scores. For perspective, the full range for FICO Scores is 300-850. Inquiries can have a greater impact if you have few accounts or a short credit history. Large numbers of inquiries also mean greater risk. Statistically, people with six inquiries or more on their credit reports can be up to eight times more likely to declare bankruptcy than people with no inquiries on their reports. While inquiries often can play a part in assessing risk, they play a minor part. Much more important factors for your scores are how timely you pay your bills and your overall debt burden as indicated on your credit report.

Does the formula treat all credit inquiries the same?

No. Research has indicated that FICO Scores are more predictive when they treat loans that commonly involve rate-shopping, such as mortgage, auto and student loans, in a different way. For these types of loans, FICO Scores ignore inquiries made in the 30 days prior to scoring. So, if you find a loan within 30 days, the inquiries won't affect your scores while you're rate shopping. In addition, FICO Scores look on your credit report for rate-shopping inquiries older than 30 days. If your FICO Scores find some, your scores will consider inquiries that fall in a typical shopping period as just one inquiry. For FICO Scores calculated from older versions of the scoring formula, this shopping period is any 14 day span. For FICO Scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span. Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO Scores.

Multiple credit inquiries within a certain time frame will be considered ONE inquiry as far as scoring. Different FICO algorithms will treat this differently, however all Mortgage Qualifications require the FICO 2004 versions be used due to being completely screwed over by the incompetence of anything relating to the US government, so you really only need to worry about that FICO version.

You will find multiple INQ on your report but they should be counted as one when your score is calculated. Additionally, the steps of INQ when going through the algorithm are 0 INQ, 1-2 INQ, 3-4 INQ, More than 4 INQ. So Inq don't really affect that much since going from 0 to 1 or 0 to 2 is the same. As far as scoring goes, this is really a minor impact on most scores unless you barely qualify in the first place.

Basically, the criminals in charge have screwed you over pretty well but this in one place where it really doesn't matter much, if at all. Shopping around for a loan in a SHORT period doesn't affect you more than applying for one loan as long as the idiot in the mortgage companies code it correctly during the application process..