A mortgage lender that requests your credit report will drop your credit score by five points. One mortgage application and the five point drop is not likely to have any negative effect on your chances of approval and level of interest rate. So if you are responsible and visit with say 20 different lenders who all pull your report, simply looking for the best mortgage will drop your score by 100 points. That is a big deal. 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. A person requesting multiple credit cards for example, has a greater opportunity to use them and increase their level of debt.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. 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.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.