Hi Mary,

No one knows what goes into the “little black box” that determines credit scores other than the companies that supply them.  We all know a little just from using credit, but we never know to what extent those items will affect us.  We know, for instance, that applying for excessive credit will lower your score, but how much is too much?  We know late payments, too much credit, or insufficient credit will also reduce scores.  We know that stability in your credit profile is good, but we are unsure what changes will adversely affect your scores. 

We do know, though, that your approval or denial of credit should be reported to the agencies by lenders.  Therefore, if you do not receive a new loan when you apply, the agencies do not know if you were denied credit or chose not to complete the transaction for another reason.  In other words, to make a long story short, if a lender rejects your application for a reverse mortgage, it should not have any effect on your credit score because the credit agency has no way of knowing if you were denied credit or if you chose to cancel for your reasons. 

Credit professionals have told us that your score should also be acceptable if more than one lender turns you down quickly, as multiple inquiries in the same field are treated like someone shopping for the best options.   Credit score providers look at that differently than someone who might have many recent credit inquiries in different areas (cars, mortgages, credit lines, and credit cards, etc.), which could tend to indicate the individual is about to open many new lines of credit for which they are not prepared. Therefore, that borrower should not be penalized for being a prudent borrower.

Also See: Credit Requirements for a Reverse Mortgage