does getting prequalified for a home loan hurt your credit

Many prospective homebuyers wonder whether getting prequalified for a home loan will negatively impact their credit score. The answer is generally no.

Understanding Prequalification and Credit Inquiries

When you apply for a home loan prequalification, the lender will assess your financial situation to determine how much you may be eligible to borrow. To do this, they will typically perform a soft credit inquiry, which does not affect your credit score. Soft inquiries do not appear on your credit report visible to others.

Soft credit inquiries are a routine part of the prequalification process, and they are used to verify your identity, review your financial history, and gain insight into your ability to repay a loan. Since they have no impact on your credit score, you can feel confident in seeking prequalification without worrying about any potential harm to your credit.

Avoiding Multiple Prequalification Inquiries

While a single prequalification inquiry has no impact on your credit, it’s important to be mindful of multiple credit inquiries. If you apply for prequalification with multiple lenders within a short period, it could be viewed as a signal of potential financial distress. This could impact your credit score, as it may be interpreted as a sign that you are desperately seeking credit.

However, credit scoring models are designed to understand that people sometimes shop around for the best loan terms. For this reason, credit bureaus group multiple inquiries made within a specific timeframe as a single inquiry for scoring purposes. The exact timeframe varies depending on the credit scoring model (generally anywhere from 14 to 45 days), but this allows you to explore your options without excessively impacting your credit.

Prequalification vs. Preapproval

It’s important to note the difference between prequalification and preapproval. While the terms are sometimes used interchangeably, they are not the same thing. Prequalification is an informal process that gives you an estimate of what you may be eligible to borrow based on the information you provide to the lender.

On the other hand, preapproval is a more formal process that involves a thorough review of your financial documents, including your income, assets, and credit history. During preapproval, the lender will perform a hard credit inquiry, which can have a small negative impact on your credit score (typically a few points lower) but is generally inconsequential.

Maintaining Your Credit Health

While getting prequalified, or even preapproved, for a home loan has minimal impact on your credit, it’s still essential to maintain healthy credit habits throughout the homebuying process:

  • Pay your bills on time: Timely payment history is a crucial factor in your credit score.
  • Avoid taking on new debt: Opening new lines of credit or increasing your credit utilization ratio can negatively impact your credit.
  • Keep credit card balances low: High balances relative to your credit limits can harm your credit score.
  • Monitor your credit: Regularly check your credit reports for accuracy and address any discrepancies promptly.

By following these simple guidelines, you can maintain or improve your credit health while navigating the home loan process.


Getting prequalified for a home loan generally does not hurt your credit. Soft credit inquiries made during the prequalification process have no impact on your credit score. However, it’s important to avoid excessive prequalification inquiries within a short period, as this could raise concerns about your financial stability. It’s also crucial to differentiate between prequalification and preapproval, as they involve different levels of review and credit inquiries. By maintaining healthy credit habits, you can confidently pursue prequalification and ultimately secure the home loan you need.