A common misconception related to mortgage shopping is that having multiple lenders checking your credit report will negatively impact your credit score. This fear has caused many to reduce their mortgage shopping to only one or two lenders and obtain a very small range of mortgage options to choose from. It's an understandable concern and in years past it was also valid, but not so today. Most people, including the credit bureaus, encourage borrowers to diligently shop for their mortgage with a number of lenders to obtain the best rates and terms for their unique situation. The bottom line is when done properly, mortgage shopping will absolutely not drop your credit score. Whenever a potential creditor requests your credit report, it is called a credit inquiry. When you are seeking to obtain new lines of credit, it makes sense that it would affect your credit score for several reasons. First, any credit application is in reality a request to increase your debt. The more credit or debt opportunity a person has increases the chances that a person will eventually be unable to pay back the debt and will default on the loans. A person requesting multiple credit cards for example, has a greater opportunity to use them and increase their level of debt. There are also different types of credit requests that are calculated differently by the credit bureaus. That is why applying for a car loan will be treated differently than applying for a mortgage. With a car, the value of the vehicle is almost certainly going to drop, while the equity in a home has the potential to increase. Auto loan applications will cause a larger dent to your score than a mortgage for good reason.