WPCNR'S ADAM IN ALBANY. By Assemblyman Adam T. Bradley. March 15, 2005: Buying a home is a daunting task, everyone should try to get the best mortgage rate they can to help keep their monthly bills in check. But not everyone knows that shopping for the best mortgage can hurt your credit, making it more difficult to purchase your dream home.
To take the mystery out of mortgage shopping and to help protect homebuyers’ credit, this week I introduced two bipartisan bills in the Assembly. My first bill would prevent consumer reporting agencies from penalizing a person for requesting a rate quote when determining a credit score (A.6303). My second bill would require lenders to inform customers of the potentially negative effect mortgage rate shopping can have on their credit (A.6306).
Currently, when a consumer is shopping for the most competitive mortgage rate, their credit score could drop when they engage in comparison-shopping. Furthermore, the consumer is rarely notified that a credit check will lower their score because lenders are not required to provide the information.
When consumers do become aware of the situation, they are deterred from further comparison-shopping due to the threat of a lower credit score or a negative inference on their credit report, which could lead to higher interest rates or increased financing fees. It is simply unfair to the consumer, who could save thousands of dollars with the right mortgage rate.
Homebuyers should be able to shop for the lowest mortgage rates and fees available without fear of a lower credit score. My legislation corrects this inequity by preventing a negative inference on a person’s credit report for competitive mortgage shopping and ensures that a person will not have their credit score adversely affected when they seek to find the best mortgage rate. In addition, it will make consumers more educated when dealing with their credit and lenders. I will work with my colleagues in the Assembly and Senate to provide homebuyers with the tools they need to make their dream of owning a home a reality.
