Does a Mortgage Pre-Approval Affect Your Credit Score?

Buyers are often encouraged to get pre-approved before submitting an offer on a home. A mortgage pre-approval can help you estimate how much you can afford to buy and communicate to the seller that you’re a serious buyer. 

However, getting pre-approved slightly lowers your credit score if the lender  performs a hard inquiry on your report. A hard pull signifies you’re actively seeking credit, while a soft pull is generally used to check your credit score. Borrowers don’t usually need to authorize soft credit checks and may not even know that they’re happening.

While a dip in your score isn’t ideal, the impact of a hard inquiry is usually minimal and temporary. For most people, the pros of getting pre-approved far outweigh the cons. One advantage to getting pre-approved with us at Zillow Home Loans* is that we use a soft pull instead of a hard pull when verifying your credit, which won't affect your score.

We’ll cover why it’s important to get pre-approved despite the credit impact, and when a pre-qualification makes more sense to avoid unnecessary credit pulls.

Is a mortgage pre-approval a hard inquiry?

When you submit a pre-approval application, your lender will need to verify your financial information, which may trigger a hard inquiry on the borrower’s credit report. Hard inquiries, also known as a hard pull, temporarily lower your credit score because they signal to the credit bureaus that you’re seeking new credit. Anytime a borrower applies for a loan, mortgage, or line of credit, a hard inquiry is triggered. Financial institutions check your credit report to determine if they should approve your request for additional credit. 

Although a mortgage pre-approval is not confirmation of a mortgage loan, it is a conditional commitment to lend you money if all loan conditions are met before closing. Once you’re pre-approved, lenders will also provide you with a pre-approval letter that you can include along with your offers to show sellers that you have secured financing and are serious about moving forward with the deal.

Does a mortgage pre-qualification hurt your credit?

A mortgage pre-qualification typically does not hurt your credit, because it usually involves a soft inquiry. Soft inquiries don’t signal to the credit bureaus that you’re seeking new credit and don’t impact your score when viewed. You may even see your banks offer you the ability to check your credit score using this same process.

During pre-qualification, lenders use basic financial information you provide to estimate how much you may be able to borrow. You can always confirm with the lender beforehand whether a pre-qualification will involve a hard or soft inquiry.

How long does it take for a hard inquiry from a pre-approval to fall off your report?

A hard inquiry from a pre-approval can stay on your credit report for up to two years, but it only affects your credit score for about a year. The negative impact on your score usually subsides within just a few months, so don’t let the temporary drop in your score stop you from getting pre-approved. 

Getting pre-approved with multiple lenders can help you compare loan terms, rates, and fees. As long as you submit your pre-approval requests within a 14 day period, they’re all counted as a single hard inquiry on your credit report. The same is true when you apply for a mortgage loan with different lenders. 

Why should I get pre-approved?

Getting pre-approved isn’t required, but it’s highly recommended for borrowers who are serious about buying a house. Including a pre-approval letter in your offer helps you stand out from other buyers, especially in a competitive market. It also provides you with a clear estimate of how much you can borrow, allowing you to set a home buying budget and narrow down your home search. 

Give yourself enough time to find the right home by getting pre-approved at least 90 days before you plan to close. Pre-approvals last 30-90 days, depending on the lender. The expiration date should be included on your pre-approval letter. Once that date has passed, your pre-approval letter is no longer valid and you’ll need to get another one if you want to include it in your offer. 

When should I get pre-qualified?

Getting pre-qualified isn’t required either, but it’s recommended for borrowers who are thinking about getting a house. Although a pre-qualification doesn’t carry the same weight as a pre-approval, it can help you estimate how much house you can afford. If you’re at the beginning stages of house shopping but aren’t sure about getting a mortgage just yet, consider getting pre-qualified before getting pre-approved. You can get pre-qualified with us at Zillow Home Loans* in as little as five minutes.

*Zillow Home Loans; an equal housing lender. NMLS #10287.