What does a soft prequalification check do, and what happens next?
What the soft check does
With your permission, the lender orders your credit report and scores without a hard inquiry. A soft inquiry is recorded on your file, and only you see it, on your own copy. It does not count in any credit score, and other lenders cannot see it.
The lender receives the report: your accounts, balances, payment history and scores. You receive the score disclosure, which lists every score the lender used, under the model named, with the key factors behind each. Problems show up while there is still time to deal with them.
What a soft check includes
Which soft checks are offered is the lender’s choice. There are two:
- A one-bureau soft check returns a VantageScore only. It is the lowest-cost start.
- A three-bureau soft check returns Classic FICO and VantageScore 4.0 from each bureau.
A one-bureau check gives your lender one bureau’s view and one score. A three-bureau check gives the middle score most loans are priced on.
What a prequalification letter says and does not say
| It says | It does not say |
|---|---|
| A lender has looked at your credit and is willing to lend, on stated assumptions | That you are approved, or that the loan is guaranteed |
| About how much the lender would consider | Your rate or final terms |
| That your credit was reviewed | That your income, assets, the home and its appraisal have been checked |
Lenders use “prequalification” and “preapproval” differently. Some issue a prequalification letter on information you report and a preapproval only after they verify it. Ask your lender what its letter is based on.
What happens next
- You read your score disclosure. It shows your scores and the factors behind them. Your loan officer can tell you which pricing tier they put you in. If something on the file looks out of date or wrong, ask your loan officer about it now.
- You decide whether to go ahead. With this lender, with another or later. The check commits you to nothing.
- The file grows. If you go ahead, your lender can add bureaus to the file you started; a full hard report is still pulled close to closing. You do not start over.
- The hard report usually counts once. Scoring models treat several mortgage inquiries made close together as one, so comparing lenders inside a short window costs little. Our guide to why other lenders call after you apply covers that window and the calls that can follow a hard pull.
If you do not qualify yet
A soft check can show that a score is below a lender’s minimum or short of a better tier. Months before you buy, you can dispute errors yourself, free, with the bureau. Closer to buying, a loan officer can ask for out-of-date information to be updated. If you do not qualify, the lender has to tell you, even without a formal application.
Questions people ask
Does mortgage prequalification affect my credit score?
Not when it uses a soft check. A soft inquiry does not count in any score, and other lenders cannot see it. A hard inquiry comes later, when the full report is pulled.
Can a lender check my credit without a hard pull?
Yes. With your permission, a soft check gives the lender your report and scores. A hard report is still needed before the loan closes.
Is a prequalification letter enough to make an offer on a home?
That depends on the market and the seller. Letters are not guaranteed loan offers, and lenders use the names differently. Ask your agent what sellers in your area expect.
Notes and sources
- Credit Technologies: Soft credit check vs. hard pull
- BestQualify: Why do other lenders call after I apply for a mortgage?
- CFPB: What kind of credit inquiry has no effect on my credit score?
- CFPB: What's the difference between a prequalification letter and a preapproval letter?
- Fair Credit Reporting Act section 604, 15 U.S.C. 1681b (permissible purposes, including a credit transaction you initiate)
- Fair Credit Reporting Act section 609(g), 15 U.S.C. 1681g (the score disclosure a mortgage lender gives you)
Spot something wrong? Tell us