Mortgage Soft Credit Check Inquiry

Updated · Apr 29, 2022

When you apply for a mortgage, the lender does a hard credit check to make sure you are eligible. But hard pull will leave a mark on your credit score.

So, how to shop around without hurting your score?

And what is the role of a soft credit check in mortgage applications?

Read on to find out.

What Is a Soft Credit Check?

A soft check is an inquiry on your credit history that doesn’t hurt your score. It occurs for informational purposes only.

Your credit score doesn’t go down when:

  • you check it
  • an employer requests it as part of a background check
  • a creditor pulls it for a prequalification

The soft inquiry is how you can find out what terms you qualify for without applying for credit officially.

What Is a Hard Inquiry?

Hard inquiries are made when a financial institution checks your report as part of your application for a loan or credit card.

While a soft credit check doesn’t affect your credit, a hard pull does.

Why?

It shows that you're actively seeking new forms of credit. Having too many hard inquiries on your report suggests that you're desperate for a loan but lenders won’t approve you.

The good news is that hard inquiries stay on your credit report for two years.

Plus, their impact is minimal, and it decreases after the first year.

Does Shopping Around for a Mortgage Hurt Your Credit?

Comparison shopping can help you find the best mortgage terms you can get. And it doesn’t necessarily hurt your score.

You can’t get a mortgage approval or preapproval without a hard credit check.

But you can shop with a soft inquiry and reduce the impact of hard pulls to a minimum.

Here’s how.

Does a Soft Credit Check Affect Your Mortgage Application?

A soft pull doesn’t affect your mortgage application or your credit score. It does, however, give you an idea of the terms you might get.

There are two situations that involve a soft credit check for a mortgage.

The first one is when you check your own score. Since that is a soft inquiry, it won't affect your credit.

Before you start applying, you need to know what your credit score is. Most mortgage lenders require a FICO® Score above 620.

If yours is below that, you might want to hold off on applying for a mortgage until you raise your score.

The second situation that involves a soft pull is mortgage prequalification. In that case, the creditor makes a soft inquiry and gives you an estimate of the terms you'll get.

This doesn't impact your score, but it doesn't guarantee you'll get exactly the same offer when you apply either.

Still, it is a good starting point.

How Many Times Can You Pull Credit for a Mortgage?

You can shop around for a mortgage without hurting your score.

FICO ignores inquiries for loans that require rate-shopping, such as a mortgage, auto, and student loans, made in the 30 days prior to scoring.

Inquiries older than 30 days count as one if made within the mortgage credit pull window. You can consult as many creditors as you want as long as you do it within that period.

For older versions of FICO, that is 14 days. Newer versions provide a 45-day window.

The only downside is that you don’t know which version the lender will check. To be on the safe side, stick to the two-week period.

How to Shop for a Mortgage Without Hurting Your Score?

Shopping for a mortgage can be a daunting task.

All the same, it's your future home which you will be repaying for years. Finding the best possible terms is essential.

Here’s how to shop for mortgage rates:

  • Know your credit score and history. Before you start shopping for a mortgage, check your credit score and credit report. This will help you determine which lenders are more likely to approve you for a loan.
  • Shop around for the best rates. Once you’ve narrowed down your choice of suitable lenders, check what terms they’ll offer you. This step is called prequalification. You can prequalify without hurting your credit score—it counts as a soft inquiry.
  • Get preapproved before shopping for homes. Prequalification is useful, but the offer you get with it is provisional. To lock in the terms, you need preapproval.

Preapproval will give you up to 90 days to find your dream home. When you do, you go back to the lender and get the mortgage almost immediately.

Getting preapproved does hurt your credit. That said, you’ll probably get through the preapproval process only once. And even if you have to do it multiple times, they’ll count as one if they’re in the rate shopping window.

  • Don’t do anything that can harm your score before finalizing the deal. Even if you’re preapproved, it can still fall through. The creditor will make a soft credit pull before closing. This is a precaution to ensure there are no major changes to your credit.

That’s all it takes to find a mortgage without hurting your credit score.

Wrap Up

To give you a mortgage, the lender has to do a hard credit check.

So why do you need a soft credit check for a mortgage?

It gives you an idea of what terms you are likely to qualify for.

Plus, unlike a hard pull, it doesn’t hurt your score.

Follow our tips above to learn how to shop for a mortgage without hurting your score.

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Aleksandra Yosifova
Aleksandra Yosifova

With an eye for research, Aleksandra is determined to always get to the bottom of things. If there’s a glitch in the system, she’ll find it and make sure you know about it.