Does Getting Prequalified on Zillow Hurt Your Credit?

A lot of people who want to buy a house start the mortgage process by getting prequalified and preapproved. But many people want to know if getting prequalified on Zillow hurts their credit.

The short answer is no, mortgage prequalification on Zillow does not hurt your credit. Here’s a detailed look at why.

What is Mortgage Prequalification and Preapproval?

Before diving into credit impact, let’s quickly summarize what prequalification and preapproval mean

• Prequalification – Provides a ballpark estimate of what you may qualify for based on limited information you provide Usually no credit check required.

• Preapproval – Requires you submit documents to confirm your financials. Includes a soft or hard credit check depending on lender. Provides a more accurate loan amount you may qualify for.

Prequalification gives you an idea of affordability. Preapproval verifies you meet requirements and are a serious buyer.

Why Prequalification Doesn’t Hurt Credit

When you prequalify with Zillow, they conduct what’s called a soft credit check, not a hard inquiry. Here are 3 key reasons this soft check won’t hurt your credit:

1. No Hard Inquiry on Report

A soft check looks over your credit report but doesn’t change your score. Lenders have to pull your full credit report for hard inquiries, which can lower your score.

Zillow uses a soft inquiry so prequalification won’t cause a hard inquiry on your report.

2. Won’t Impact Credit Score

A soft credit check does not only not make a hard inquiry, it also has no effect on your credit score. It lets Zillow review your report without impacting the score.

3. Not Visible to Other Lenders

Soft checks are also not visible to other lenders, so you don’t have to worry about multiple prequalification checks hurting your chances of getting approved down the road.

As you can see, you avoid all the potential credit damage of a hard inquiry with prequalification.

Preapproval May Cause Hard Inquiry

Now you may be wondering – what about preapproval? Does that hurt your credit?

With preapproval, it depends on the lender. Some lenders do preapprovals as a soft check, while others may do a hard inquiry.

Here are a few key points on preapproval:

• Check with Your Lender – Ask whether they do soft or hard inquiry for preapproval. This can help you decide.

• Score Won’t Drop Much – Even if hard check, expect only a minor 5 point drop, if any.

• Temporarily Impacts Score – Any score impact recovers in just a few months as long as you keep credit activity low.

While lenders vary, the impact of even a hard credit check for preapproval is minor and temporary. But verifying whether your lender does a soft vs hard check can give you peace of mind.

Prequalification Won’t Guarantee Approval

While prequalification doesn’t hurt your credit, it’s important to understand it also doesn’t guarantee you will get approved further down the line.

Here are some key things to keep in mind:

• Information provided is not verified – lender takes your word for it

• Require full application to be approved for a loan

• Financial situation may change during homebuying process

Think of prequalification as an estimate only. It’s a helpful early step, but not a guarantee of final approval.

Strategic Ways to Minimize Credit Impacts

If you want to minimize any credit impact when getting prequalified or preapproved, here are some tips:

• Compare Rates First – Many lenders allow you to check rates without any credit check. Use this to narrow down top 2-3 lenders.

• Spread Checks Over Time – Don’t do multiple checks all at once. Space them out over several months.

• Avoid Other Hard Checks – Before applying, avoid any other credit checks like new cards.

• Review Reports First – Check all 3 credit reports before applying and resolve any issues early.

• Ask About Soft Checks – Verify if lender does soft checks for preapproval to limit hard inquiries.

Following these best practices can limit any minor dings to your score.

The Bottom Line

At the end of the day, prequalification through Zillow will not hurt your credit score or report. The soft inquiry allows you to safely check potential mortgage eligibility early in the process without damage. Even mortgage preapprovals typically only cause minor temporary impacts to credit, if any.

While prequalification doesn’t guarantee final approval, it can provide valuable insight into the mortgage amount and monthly payments you may be able to afford. This makes it a useful first step for aspiring homebuyers before they dive into house hunting.

If you’re considering buying a home soon, go ahead and prequalify with Zillow or lenders you’re interested in to start evaluating options comfortably, without worrying about harming your credit. This early look at affordability makes the overall mortgage process smoother once you’re ready to get preapproved and submit a full application.

You can also check out Zillow’s mortgage learning center for helpful articles and tips covering everything home buyers need to know about getting financed.