A soft-credit check is basically a little peek behind the curtain. You’ve probably done soft credit checks on yourself (if you haven’t, you should), where your mobile banking or credit card app tells whether your credit score is up or down on any given day. You might get soft credit checks from employers or credit card applications, too (they’re pretty common).
Also called a “soft inquiry” or a “soft pull,” soft credit checks don’t impact your credit score because they don’t really signal to a credit bureau that you’re applying for a loan—merely that you’re shopping around or keeping track of your credit.
When you get a hard credit check, here’s what’s really happening. The lender’s going to pull your credit report from the big three—Equifax, Experian, and TransUnion. Each one of these credit bureaus has its own report on you, so the lender will be checking all three to get the full scoop on your credit history. They’ll be looking at your payment history, how much of your available credit you’re using, and any debts you’ve got hanging around. This credit check is their way of figuring out if lending you money is a smart move or a risky bet. Plus, it’s going to impact the interest rate they offer you. So, if you’ve been keeping your credit reports squeaky clean, this part of the process will be a breeze.
Do I have to have a hard credit check when I get a pre approval?
Now, if you’re smart and go with a lender that does a soft credit check (like Tomo Mortgage) for a pre approval, then guess what? No hit to your credit score at all. This is a big win because it means you can get pre approved without sweating over multiple hits to your credit if you don’t snag a house within the 90-day window (that’s how long most other lenders pre approvals last before you need a new one). But get this, here at Tomo Mortgage, your credit won’t take a hit AND, our pre approval is good for 120 days, giving you an extra month to shop. Plus, you can get your pre approval done sooner, which means you’ll have a better grip on your budget before you’re ready to throw down an offer.
Once you’re further down the line and have made an offer, it’s been accepted, and you’re ready to close, every lender you’re shopping with will need to do a hard credit check (including Tomo Mortgage). But before you start stressing, know that this dip is usually temporary, and typically a reduction of around 5 points give or take. It’s like a minor bruise on your credit score’s ego—it’ll bounce back.
Why does Tomo Mortgage use a soft credit check for my pre approval?
Utilizing a soft credit check allows us to get you pre approved sooner in your home buying process, and helps you know how much you can afford, without punishing you for shopping around. A soft credit check also gets you your pre approval faster—as quick as 15 minutes.
When do you get hit with a hard credit pull while buying a home?
It’s usually during the final stretch when you’re locking in that rate. After you’ve made an offer and are in the approval phase, your lender will dive into your credit history with a hard pull. This step is all about double-checking you’re solid for the loan before you seal the deal. It’s like the final test to make sure you’re good to go!
If you’re ready to start your journey to homeownership, get pre approved with Tomo Mortgage today.