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Does Prequalification Affect Your Credit Score?
July 1, 2025
Quick Answers
Getting prequalified for a mortgage typically will not affect your credit score, as it only requires a soft credit inquiry.
This soft pull differs from the hard inquiry of a formal application, which can temporarily lower your score.
Prequalification serves as a risk-free assessment of your borrowing capacity, allowing you to explore your options without impacting your credit.
What Is a Prequalification?
A prequalification is an initial assessment by a lender that provides a ballpark figure of the loan amount you might be eligible to borrow. This estimate is based on financial details you self-report, including your income, assets, and existing debts. Lenders often conduct a soft credit inquiry at this stage, which gives them a high-level view of your credit history without impacting your credit score.
Think of prequalification as a financial snapshot that helps you understand your potential purchasing power before you start seriously shopping for a home. It's important to remember that this is not a loan commitment, as the lender has not yet verified your financial information. This process simply offers a preliminary look at your borrowing capacity, allowing you to explore your options without affecting your credit.
How Prequalification May Affect Your Credit Score
It’s a common misconception that getting prequalified for a loan will ding your credit score. While the process can lead to a score change, the initial prequalification step itself does not.
- The Soft Inquiry: Prequalification typically only requires a soft credit pull. This allows lenders to review your credit history without affecting your score, giving you a glimpse of potential loan terms.
- The Formal Application: If you decide to proceed with an offer, the lender will then conduct a hard inquiry. This formal credit check is recorded on your report and can cause a small, temporary dip in your score.
- Opening a New Account: Successfully opening a new loan or credit line changes your credit profile. The new debt and a lower average age of accounts can initially cause your score to drop slightly.
- Multiple Hard Inquiries: While the initial prequalification is harmless, pursuing multiple formal applications with different lenders in a short period can lead to several hard inquiries, which can have a greater negative impact.
How Much Will Prequalification Affect Your Credit Score?
When considering prequalification, it's helpful to understand the potential impact on your credit. Here are a few key factors to keep in mind.
- Soft vs. Hard Inquiry: Prequalification usually involves a soft inquiry, which does not affect your credit score. A formal loan application results in a hard inquiry that can have a minor, temporary impact.
- Rate Shopping: Scoring models often group multiple inquiries for a mortgage or auto loan within a short window as one. This allows you to compare offers without significant credit score damage.
- Minimal Score Change: A single hard inquiry typically lowers a credit score by less than five points. The impact lessens over time and the inquiry is removed from your report after two years.
How You Can Avoid Prequalification Affecting Your Credit Score
Confirm Soft Inquiry
Most lenders use a soft inquiry for prequalification, which does not impact your credit score. Always verify with the lender beforehand that they will only perform a soft pull for this initial step, ensuring your credit report remains unaffected during your preliminary mortgage research.
Limit Hard Inquiries
A formal application triggers a hard inquiry, which can affect your score. To minimize the impact, submit all formal mortgage applications within a short window, typically 14-45 days. Credit scoring models often treat multiple inquiries for one loan type as a single event.
Choose the Right Card to Prequalification
No matter your current standing, improving your credit score is an achievable goal that relies on consistent, positive financial behavior. There are several proven methods you can use to boost your score, and most people see meaningful changes within three to six months.
- Set up automatic bill payments. Your payment history is the single most important factor in your credit score, so ensuring every bill is paid on time is a critical first step.
- Lower your credit utilization ratio. Aim to use less than 30% of your available credit, as high utilization can negatively impact your score. You can achieve this by paying down balances or requesting a credit limit increase.
- Become an authorized user. If you have a trusted friend or family member with a strong credit history, being added to their account can help you build your own credit profile.
- Diversify your credit mix. Lenders like to see that you can responsibly manage different types of credit, such as credit cards, installment loans, and mortgages.
- Limit hard inquiries. Applying for too much new credit in a short time can temporarily lower your score, so use prequalification tools and space out your applications.
The Bottom Line
Prequalification typically involves a soft credit inquiry, which does not impact your credit score, allowing you to explore potential loan options without affecting your credit history like a formal application.
Frequently Asked Questions
Does getting prequalified by multiple lenders hurt my credit?
No, multiple prequalification inquiries within a short timeframe are typically treated as a single event. This allows you to shop for the best rates without negatively impacting your score.
How long does a soft inquiry from prequalification stay on my credit report?
A soft inquiry can remain on your credit report for up to two years. However, it is only visible to you and does not affect your credit score calculations.
Can a prequalification ever turn into a hard inquiry?
The prequalification itself is a soft pull. However, if you decide to proceed with a formal loan application, the lender will then perform a hard inquiry to finalize the offer.
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