Does a Mortgage Preapproval Impact Your Credit Score?
You’ve found a home you love. It checks all the boxes—great location, right price range, everything you’ve been looking for. But before you can make an offer, the seller needs proof that you’re financially ready. That’s where mortgage preapproval comes in.
A preapproval letter shows lenders, real estate agents, and sellers that you’re a serious buyer. But if you’re worried about how it affects your credit score, you’re not alone. A hard credit inquiry can lower your score slightly, but it’s temporary—and the benefits far outweigh the small dip.
When the right home comes along, you don’t want to hesitate. Start your preapproval today with Rate so you’re ready to make a move: Apply now.
How Does a Mortgage Preapproval Work?
When you're buying a home, you don’t want to waste time looking at houses outside your price range. That’s where a mortgage pre-approval comes in.
A lender reviews your financial information, including your credit history, income, and debt-to-income ratio, to determine how much you can borrow.
While a preapproval letter isn’t a guarantee of final approval, it gives you a clear idea of your loan amount and makes you a stronger buyer in the eyes of sellers and real estate agents.
Submit Your Financial Documents
To start the preapproval process, you’ll need to submit key financial documents that help your mortgage lender assess your creditworthiness. These typically include:
- Proof of income (pay stubs, tax returns, W-2s)
- Recent bank statements to verify assets
- Employment verification to confirm job stability
- Your credit history and credit report
Lenders use this information to decide if you’re a good candidate for a mortgage loan and determine your potential loan amount. If everything checks out, you’ll move to the next step in the pre-approval process.
Receive a Preapproval Letter
Once your mortgage lender reviews your financial situation, they’ll issue a preapproval letter stating how much you can borrow.
This letter is your golden ticket in the homebuying process—it shows sellers and real estate agents that you’re financially ready to make an offer. It also helps you budget for mortgage payments and plan your home purchase wisely.
A preapproval letter is typically valid for a short period of time (about 60–90 days). If it expires before you find a house, you may need to update your financial documents and go through another credit check before getting a new one.
Mortgage Preapproval vs. Prequalification
Some buyers confuse mortgage prequalification with mortgage preapproval, but they’re not the same. While both help you understand your home loan options, a preapproval letter carries far more weight when it comes to making an offer.
Prequalification Gives You an Estimate, Preapproval Confirms Your Borrowing Power
A mortgage prequalification is a quick estimate based on self-reported financial information. You tell a lender your income, debts, and credit situation, and they give you a rough idea of how much you might be able to borrow.
A mortgage pre-approval, on the other hand, is based on verified financial documents. The lender reviews your credit report, debt-to-income ratio, and income, making it a far more reliable assessment of your loan amount.
Preapproval Requires a Credit Check, Prequalification Does Not
A mortgage preapproval involves a hard credit inquiry, meaning the lender pulls your credit report from major credit bureaus. A hard credit pull can lower your credit score by a few points, but the impact is temporary.
A prequalification, on the other hand, typically involves only a soft credit check, which doesn’t affect your credit score. While this can give you an idea of your price range, it doesn’t carry much weight when making an offer on a home.*
Preapproval Involves More Documentation Than Prequalification
Since a preapproval letter is based on verified financial information, you’ll need to provide actual documentation, such as bank statements, tax returns, and proof of income.
A prequalification, however, relies on self-reported details and doesn’t require supporting documents.
A Preapproval Letter Strengthens Your Offer, Prequalification Does Not
A mortgage preapproval shows sellers and real estate agents that a lender has reviewed your financial status and is willing to lend you money. This makes you a stronger buyer, especially in a competitive market.
Without a preapproval letter, your offer might not be taken seriously—especially if there are multiple buyers bidding on the same home. Many sellers won’t even consider an offer without one.
Preapproval Takes Longer but Provides More Certainty
Since a mortgage preapproval requires a full review of your financial documents, it takes longer than a prequalification—typically a few business days. However, the extra time is worth it because it gives you a more accurate loan amount and helps avoid surprises later in the homebuying process.
A preapproval letter also makes the final approval process smoother. Since most of your financial information has already been reviewed, underwriting moves faster, reducing the risk of delays.
If you're serious about buying a home, getting preapproved is a good idea. It helps you understand how much house you can afford, improves your chances with sellers, and speeds up the mortgage application process.
Will a Mortgage Preapproval Impact My Credit Score?
Yes, but not by much. When you apply for a mortgage preapproval, the lender performs a hard inquiry—also known as a hard pull—on your credit report to assess your financial situation. This can temporarily lower your credit score by a few points, but it’s usually not a cause for concern.
The good news? This impact is minor and short-lived. If you maintain good standing by making timely payments and avoiding too many applications for new credit, your score should recover within a few months.
In fact, having a mortgage preapproval in hand can strengthen your position as a home buyer, making it easier to lock in a competitive interest rate and secure financing when you find the right home.
Hard vs. Soft Credit Inquiry
Not all credit inquiries affect your credit score in the same way. Here’s the difference between a hard inquiry and a soft inquiry and how they impact your financial decisions.
Hard Inquiry
A hard inquiry occurs when a lender, credit card issuer, or other financial institution pulls your credit report to determine whether you qualify for a loan, credit card, or another credit product.
Since a hard pull indicates you’re actively seeking new credit, it can cause a slight drop in your score, especially if multiple hard checks occur within a short period of time.
That said, if you're applying for a mortgage preapproval, multiple inquiries from different lenders within a 14- to 45-day window are typically treated as a single inquiry for scoring purposes.
This allows buyers to shop around for the best mortgage rate without a significant impact on their credit score.
Soft Inquiry
A soft inquiry, on the other hand, does not impact your credit score. These happen when you check your own credit report, when a credit card company prequalifies you for an offer, or when a utility company verifies your financial stability.
How Long Your Credit Will Be Affected
A hard credit check from the mortgage preapproval process may stay on your credit report for up to two years, but its actual impact on your score is much shorter.
Most buyers see their credit score return to normal within a few months, assuming they continue managing their credit utilization ratio responsibly and avoid unnecessary new credit applications.
How Long Does a Preapproval Last?
A mortgage preapproval typically lasts between 60 and 90 days, though some lenders may offer shorter or longer windows depending on their policies. This expiration date ensures that your financial information is up to date when you’re ready to make an offer on a home.
If you don’t find a house within that time frame, you may need to repeat the pre-approval process, which could involve another hard inquiry.
To minimize unnecessary credit inquiries, it’s a good idea to time your homebuying journey carefully and only request preapproval when you’re seriously looking.
How to Get a Mortgage Preapproval
A mortgage preapproval is a key step that puts you ahead in the homebuying process. It gives you a clear idea of your loan amount, strengthens your offer, and helps you move fast when you find the right home.
While a hard credit inquiry may cause a small dip in your credit score, the trade-off is worth it for the confidence and leverage it gives you.
When you’re ready to take that next step, Rate’s preapproval makes the process quick and hassle-free, so you can focus on finding a home you love. Get started today: Apply for mortgage preapproval.
Rate, Inc. does not provide credit counseling or credit repair services.
*The soft credit pull pre-approval option is available on conventional, government, and jumbo loans for purchase or refinance. No co-mortgagors are permitted at this time. This pre approval is an early assessment of borrowers’ qualifying information. A hard credit pull is required prior to a loan being submitted to underwriting and will impact borrower's credit score. Borrowers already under contract will default to a hard credit pull when they apply for loan approval. Applicants are subject to credit and underwriting approval. Not all borrowers will be approved. Restrictions apply.
