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Will a Prequalification or Preapproval Affect Your Credit Score?

What you'll learn: How a prequalification or preapproval might affect your credit


“Homeowner” has a nice ring to it, right? As you get closer to buying a home, there are a few steps you can take to help ensure you get a mortgage that’s right for you, and ultimately, the home you want. Just remember, getting your credit checked is part of the process, and understanding what it encompasses will help as you pursue homeownership. Here’s what you need to know about getting prequalified and preapproved for a mortgage and how a credit check can potentially affect your credit score.

What is prequalification vs. preapproval?

Getting prequalified and preapproved are two important steps in applying for a mortgage, but are you clear on what they mean? The difference in these terms usually lies in how your financial readiness is checked.

Your first step is prequalification, which means:

  • Your lender has typically pulled your credit score and asked for, but not yet verified your income.
  • You can inform a seller that your credit is good, and that if your income stands up to review, you’ll likely be qualified to purchase a home
  • You’ll be provided with an approximate amount of how much you may be able to borrow

Preapproval, your second step:

  • Verifies not only your credit, but also your income and assets.
  • Involves completing a mortgage application and requires a credit history check.
  • Provides you with a specific loan amount you can borrow from your lender and potential interest rate figures

Wondering if you can get more than one preapproval? You can and may want to consider it to explore what different lenders have to offer. That way, you can find which option works best for you.

How might a prequalification or preapproval affect your credit score?

If you’re concerned about whether a mortgage prequalification or preapproval will affect your credit score, here’s a quick rundown. A mortgage prequalification or preapproval may require a hard credit pull, which can potentially affect but isn’t necessarily bad for your credit score.

Each time you submit an application for credit, your credit score is reviewed. Multiple hard inquiries may indicate to lenders that you’ve opened several lines of credit, which could be a red flag for high-risk financial behaviors. So, for example, if you were getting ready to buy a home, you wouldn't also want to buy a car or other large-ticket item that would require you to open another line of credit. Keep in mind that various pulls for a particular type of credit, such as a mortgage, tend to have less of an impact on your credit, compared to a number of pulls from different sources.

Fortunately, a preapproval often lasts for about 60-90 days, which can give you enough time to shop around for the lowest rates and think through your homebuying decisions. As getting prequalified and preapproved provide you with a price point, these steps can also help you save time by narrowing your scope of search to homes that are in your range of cost.

Essentially, setting a homebuying time frame can help you limit credit pulls prior to purchasing and get preapproval when you start house hunting, to help ensure you’re ready to buy before your preapproval expires.

Got your prequalification and preapproval? Now you’re on your way.

Taking key steps such as getting mortgage prequalification and preapproval can help you gauge your budget and show a seller that you’re a serious buyer – and get set to take on that exciting, new role as a homeowner.

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After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5


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Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5


1Rates are updated daily at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on discount point, which equals percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $400,000; loan-to-value ratio of 75%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.