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Does Prequalification Affect Credit Score?

Sarah Li Cain • January 17, 2024

Taking the time to shop around for lenders can help you find a loan that’s the best fit for you. Comparing loan quotes can also help determine how much you can borrow and at what rates.

One way to compare rates is through prequalification. To prequalify, the lender assesses basic requirements to determine the chances of you qualifying for the loan. This is done through a soft inquiry, so it doesn’t impact your credit score. Knowing if prequalification affects your credit score can help you assess your financing needs.

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Reasons why prequalification does not affect credit score

Getting pre-qualified is fairly straightforward: you submit a few pieces of personal information and the lender determines whether you qualify and at what loan terms.

Getting pre-qualified won’t hurt your credit if you’re checking to see what mortgage rate you may qualify for or whether you’ll be approved for a rewards credit card.
Some of the reasons why include:

  • Prequalification involves a soft inquiry: Also referred to as a “soft pull,” lenders only look at several pieces of financial information and not everything needed to fully assess your financial situation.1 A soft inquiry does not affect your credit score. Though typically used by credit card issuers, many other lenders also use soft inquiries to see if you meet the basic criteria for their loans.
  • Prequalification is different from a hard inquiry: A hard inquiry or “hard pull” is when a lender gets access to your full credit report (with your permission). A hard inquiry happens when formally applying for a credit card or loan. It can affect your credit score.You may need to submit more information, like tax returns, proof of income, and bank statements, if you’re applying for a mortgage. There may be a temporary decrease in your credit score whether your application is approved or denied. Prequalification, on the other hand, is when a lender reviews basic information to determine your chances of a loan approval and isn’t part of a formal application. Your credit score won’t be affected.

While one application may not seriously impact your credit score, applying for too many loans at once could. There are some exceptions, like if you were to apply for loans like mortgages within a short time span, specifically 45 days.2

Consider spacing out any credit card or loan applications and avoid applying for new loans too frequently to help minimize the impact it could have on your credit score.

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What to know about prequalification

Understand what prequalification entails, whether you’re actively looking for loans or thinking about your financing needs. That way, you can be as prepared for the loan application process as possible.

Here are some of the most important details to consider:

  • How to get pre-qualified: Sometimes banks and lenders may market their loans and credit cards to people with good credit scores. As such, you may be pre-qualified or pre-approved for credit cards without any action on your part. Other ways to get pre-qualified include filling out a form online through a lender’s website. If you apply for prequalification, you may need to provide your contact information, annual income, and Social Security number.
  • Ideal timing for prequalification: There isn’t a specific timeline for when you should start getting pre-qualified. You can start whenever you want since your credit score won’t be impacted and it doesn’t take that much time to get pre-qualified. Seeing what rates and terms you may qualify for can also offer insights into what you may need to prepare for when you apply for a loan.
  • Impact on your credit score: Going through the preapproval or prequalification process won’t impact your credit score as it’s only done through a soft inquiry.
  • Prequalification is different than approval: As mentioned previously, if you’re pre-qualified for a credit card, lenders don’t check your full credit report, at least not immediately. The same goes for other types of loans. You will need to go through a full application process to see if you’re approved. Even if you’re pre-qualified for a certain loan amount and term, there’s no guarantee that’s what you’ll get after submitting a full loan application.
  • Getting denied: Unfortunately, your application could be denied whether you’re submitting a complete application or trying to get pre-qualified. If so, your next step is to get a copy of your credit report from the major credit reporting bureaus — Experian, TransUnion and Equifax — to check what may be affecting your score. Make sure to check and dispute any errors with the applicable credit bureau and the company that may have given the wrong information.3 You can also look at other steps to change your credit score, like making consistent on-time payments and lowering the amount you charge on your credit cards.

Preapproval vs. prequalification

The terms preapproval and prequalification sound similar but aren’t the same. Getting pre-approved or pre-qualified means a lender may offer you a loan based on your submitted information.

However, getting pre-approved may carry more weight, as you’ll submit more of your financial details. Since you’re giving the lender more insight into your financial situation and ability to pay back a loan, getting pre-approved could mean you’ll have a better idea of what your interest rate and terms could be if you get officially approved.

While getting pre-qualified also means a lender has looked at your creditworthiness, you’re not giving them as much information. In either case, getting pre-approved or pre-qualified won’t guarantee a loan offer.

Get prepared through prequalification

Prequalification doesn’t affect your credit score, making it a smart step when shopping for loans. That way, you can see what you may qualify for without it affecting your credit score. Once you decide on the credit card or loan you want, you can formally apply. At this point, the lender will conduct a hard credit inquiry, which can temporarily affect your score.

Looking for a loan? Find out how to apply for a personal loan.

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1 Information from Consumer Financial Protection Bureau's "What is a credit inquiry?" as of December 21, 2023:

2 Information from Consumer Financial Protection Bureau's" Contact multiple lenders" as of December 21, 2023:

3 Information from USAGov's "Dispute errors on your credit report" as of December 21, 2023:

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