Soft Pull vs. Hard Pull on Credit: What You Need to Know

When you’re on the path to securing a mortgage, there’s a lot to consider, and one aspect that often confuses potential homebuyers is the difference between a soft pull and a hard pull on their credit. Your credit score plays a pivotal role in determining the mortgage rates you qualify for, making it crucial to understand how these credit inquiries can impact your financial future. In this blog post, we’ll delve into the intricacies of soft and hard credit pulls, and we’ll explain why it’s essential to have a reliable mortgage loan originator, like Morgan Financial in Brevard County, by your side throughout the process.

Soft Pull vs. Hard Pull: What’s the Difference?

A soft pull on your credit, also known as a soft inquiry, occurs when someone checks your credit report for informational purposes without your explicit consent. These inquiries don’t affect your credit score and typically include background checks, pre-approved credit card offers, and even personal credit monitoring.

On the other hand, a hard pull, or hard inquiry, happens when a financial institution, like a mortgage lender, reviews your credit report to make a lending decision. Hard inquiries can temporarily lower your credit score and are usually associated with activities like applying for a new credit card, auto loan, or, most importantly, a mortgage.

Why Credit Inquiries Matter in Your Mortgage Loan Process

When you’re in the market for a new home and considering a mortgage, it’s important to be mindful of credit inquiries. Each hard pull on your credit can potentially impact your credit score by a few points. While one hard inquiry might not significantly harm your credit score, multiple inquiries within a short time frame can raise concerns for lenders. They might interpret these multiple inquiries as a sign of financial instability, making you appear riskier as a borrower.

This is where the guidance of a reputable mortgage lender, such as Morgan Financial, can be a game-changer.

Morgan Financial: Your Trusted Mortgage Partner in Brevard County

Morgan Financial has been serving the Brevard County community since 2002, and our seasoned mortgage professionals understand the complexities of the mortgage loan process. We are not just a lender; we are your knowledgeable partners. We’ll educate you on all your options and help you navigate the intricacies of credit inquiries. Our goal is to ensure you secure the best mortgage rates and terms possible.

When working with Morgan Financial, you’ll benefit from our expertise in soft and hard credit pulls, ensuring that your credit remains as strong as possible throughout the mortgage loan process. We’ll guide you on when and why credit inquiries are made and offer tips to minimize their impact.

Credit Scoring Models and Your Mortgage Journey

Credit scoring models also take into account when a consumer is shopping for the best rate on a student loan, auto loan, or mortgage and do not penalize them for this comparison shopping. For these types of loans, scoring models generally count multiple inquiries as one inquiry if they occur within a reasonably short period of time.

In general, credit inquiries for the same type of loan made within a 14-day period will be treated as no more than a single inquiry. For the most common credit scoring models, student loan, auto loan, and mortgage-related inquiries that occur 30 days prior to scoring have no effect at all on your credit score. Outside this 30-day period, student loan, auto loan, and mortgage-related inquiries that occur within any 45-day period are treated as a single inquiry. Source: CFPB

So, whether you’re a first-time homebuyer or looking to refinance, let Morgan Financial be your guiding light in the intricate world of mortgages. Reach out to us today, and let’s get started on making your homeownership dreams a reality!

Talk With a Mortgage Expert!

If you’re ready to take the next step, don’t hesitate to reach out to our expert team at Morgan Financial for personalized guidance throughout your mortgage journey. Your dream home awaits – let us help you make it a reality, with a commitment to a smooth and efficient closing process.