When you apply for credit, it may appear as an inquiry on your credit report even if you decide not to proceed with the credit or debt you applied for. The credit reports that mortgage companies use will show the inquiries going back 120 days.
Why does a lender care if you have credit inquiries – even if you never proceeded to take the credit that was offered to you? Inquires to your credit appears as though you are shopping for credit and therefore may be taking on additional debt. Additional debts may impact your ability to make payments on your new mortgage.
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