Does mortgage pre-approval affect credit?


The pre-approval, which is valid for 90 days, provides a written commitment to the affordability of your mortgage. It is quoted using verified information, uses documents detailing your financial situation, and uses a firm credit check. Pre-qualification, on the other hand, estimates your affordability at a given time, gives an early estimate of affordability, and is quoted using a self-attested estimate. It also uses answers to questions about your financial situation and is a self-reported credit score.

Two ways to check your credit:

There are two ways to check your credit: a soft credit check and a hard credit check. Essentially, you’re the only one who sees a soft credit check – it’s not seen by other lenders and has no impact on your credit score. A strong credit check indicates that a lender is going to extend credit to you, showing up when other lenders perform credit checks on you, and this can impact your credit score. Here’s a more in-depth look at the differences between a soft credit check and a hard credit check:

Flexible credit check. Lenders use soft credit checks when deciding whether to pre-approve you for a credit card. A lender may also use a soft credit check if your current lender submits a credit report for an account review or when a debt collector reviews a recent credit report. Your own credit rating check will also be recorded as a soft credit check.

Firm credit check. Lenders use a firm credit check, on the other hand, when you apply for a loan, usually a car loan or mortgage, or a credit card. A strong credit check indicates that you want to take on additional debt. It should also be noted that other potential lenders will be able to see any firm credit checks and therefore may impact your credit score. However, any negative impact will likely only occur if you do a lot of credit checks.

Is pre-approval a rigorous credit check?

Yes. The pre-approval is a firm credit check. Since this involves other parties reviewing more detailed information, lenders performing a rigorous credit check on you during pre-approval is a standard step in the mortgage approval process. Credit checks are therefore common, as lenders grant loans for large sums.


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