What is the difference between pre approved and approved

Q: Does pre

A pre-approval offer suggests youve passed the first step in the screening process. But remember — you cant actually be approved for the card unless you apply. You may seem like a promising candidate, but the lender will likely want more information to process your application.

Q: Is pre

See if Youre Pre-Approved When a credit card offer mentions that someone is pre-qualified or pre-approved, it typically means theyve met the initial criteria required to become a cardholder. But they still need to apply and get approved. Think of these offers as invitations to start the actual application process.

The home buying process typically includes getting pre-qualified and/or pre-approved for a mortgage. However, pre-qualification and pre-approval are not the same. And in a competitive market, knowing which to get could be the difference between landing your dream home and losing it to another buyer.

Table of Contents Show

What Does it Mean to be Pre-Qualified?
What Does it Mean to be Pre-Approved?
Which One Should I Get?
How to Get Started
What Does Prequalified Mean?
What Does It Mean to Be Preapproved?
Do Preapproval and Prequalification Offers Impact Credit Score?
Can I Opt Out of Credit Card and Loan Offers?
Rate Shop Without Hurting Your Credit
Can you get pre

This blog breaks down the differences in mortgage pre-qualification and pre-approval so that you’re better prepared to make the winning offer.

(Psst, looking for info on getting pre-approved versus pre-qualified for a vehicle instead? We have a blog about that, too! Check it out here.)

What Does it Mean to be Pre-Qualified?

Being pre-qualified means a lender has decided you will likely be approved for a loan up to a certain amount, based on your current financial situation.

To get pre-qualified, you simply tell a lender your level of income, assets, and debt. The lender will then take that unverified information and determine the mortgage amount you will likely be approved for. There are no guarantees you will actually be approved for the same amount because the information hasn’t been independently verified.

Benefits of Pre-Qualification

No effect on credit score
No fees
Helps you estimate what you can afford
Good for first-time homebuyers

While pre-qualification is often the first step of the mortgage process, some sellers won’t take you seriously until you’ve been pre-approved.

What Does it Mean to be Pre-Approved?

Being pre-approved means you’ve actually been approved by a lender for a specific loan amount. When pre-approved, you will receive a letter that states your approved loan amount.

Unlike getting pre-qualified, when getting pre-approved, you provide documented financial information (pay stubs, statements, obligations, credit report, etc.) to be reviewed and verified by the lender.

Benefits

No fees
Gives you negotiation power
Helps you know exactly what you can afford
Allows you to close faster

Something to keep in mind is that being pre-approved doesn’t guarantee you a loan. You still have to complete the application, go through the underwriting process, and wait for final approval. But being pre-approved indicates your financial ability and intent to purchase, so sellers look fondly upon buyers with pre-approval letters.

Which One Should I Get?

If you’re just starting the process of home buying, not sure just how much home you can afford, or if you’re not quite ready to buy yet, pre-qualification makes sense. Getting pre-qualified doesn’t affect your credit score, so it’s a good way to begin if you’re just browsing.

However, if you’re ready to buy within 90 days, pre-approval is what you want. When the housing market is hot, homes sell fast — sometimes within hours of being listed. If you already have financing, you can move fast — which gives you an immediate advantage over other buyers. There is a small credit hit (typically around five points), but if you’re serious about buying a house, you need to get pre-approved right away.

How to Get Started

At Connexus, the easiest way to get pre-qualified or pre-approved is to give our professional mortgage team a call at 800.845.5025. Our team is happy to help you navigate the entire mortgage process, from the application stage to closing day. Get in touch today!

At Experian, one of our priorities is consumer credit and finance education. This post may contain links and references to one or more of our partners, but we provide an objective view to help you make the best decisions. For more information, see our Editorial Policy.

What Does Prequalified Mean?

Prequalification means the creditor has done at least a basic review of your creditworthiness to determine if you're likely to qualify for a loan or credit card. Consumers initiate this process when they submit a prequalification application for a loan or card.

Requirements for prequalification can vary depending on the situation. It may involve sharing basic information about your financial situation, such as your annual income, monthly housing payment and savings. For some prequalifications, lenders will check your credit through a soft inquiry—the type of inquiry that doesn't impact your credit scores.

Once you're prequalified, you can choose to apply and undergo a complete review process. The review may require you to submit official documents, rather than estimates, and agree to a hard credit inquiry, which can impact your credit scores.

Getting prequalified doesn't guarantee an approval. But if you're able to apply for prequalification with a soft inquiry (or no inquiry), it's generally a good idea. If you get denied at this stage, you'll know you can move on and avoid the hard inquiry.

What Does It Mean to Be Preapproved?

Getting preapproved may be a better indication that you'll get approved for a loan or card—but it depends on the process. For example, if you're preapproved for a credit card online, the card issuer may be using preapproval and prequalified to mean the same thing.

Additionally, you may have received preapproval offers for loans or credit cards by mail, phone or email. These prescreened offers generally mean you appeared on a credit reporting agency's list of consumers that meet a creditor's criteria, and have been sent a firm offer of credit as a result.

If you respond to the offer and apply, the creditor must offer you the same terms as in the mailing. But those terms may have a range, and you won't know your exact offer until you apply and agree to a hard inquiry.

Whether you applied or received an unsolicited offer saying you're preapproved, there's still no guarantee you'll get approved—especially if factors like your income, collateral or credit history have recently changed.

Mortgage and car loan preapprovals, however, are a contrast to preapproval for other types of credit and can involve a fairly complex application and review process. You may need to submit tax returns, proof of income and bank statements and agree to a credit check. The mortgage or auto lender could take some time to review and verify these documents, and they may then offer you a loan preapproval letter that's good for several months.

Do Preapproval and Prequalification Offers Impact Credit Score?

With credit cards, neither prequalification nor preapproval offers will impact your credit scores because with either process, if there's a credit check, the credit check usually results in a soft inquiry. Auto loans and mortgages are different, however, and will typically result in a hard inquiry on your credit that may hurt your credit scores. Fortunately, if it does, it's often a small impact that only lasts for a few months.

Also keep in mind that if you're rate-shopping for an auto or home loan, credit scoring models will treat all hard inquiries as one if made in a 14-day period (some models allow up to 45 days). So assuming you shop your loans in a short period of time, your credit will suffer little, if any, damage.

Can I Opt Out of Credit Card and Loan Offers?

If you're receiving prescreened credit or insurance offers, you can opt out for a five-year period or permanently by calling 888-567-8688 or visiting OptOutPrescreen.com. It can take up to 65 days for you to stop receiving these offers once you opt out.

Opting out will stop offers sent based on information in your credit report, but it won't stop all forms of prescreened offers. For example, some companies send offers based on marketing lists or mass mailings to residents of certain areas. You may be able to opt out of those lists by directly contacting the company that sent you the offer.

Rate Shop Without Hurting Your Credit

If you're looking for a loan or credit card, getting prequalified or preapproved could be a smart first step. You'll know upfront whether you're likely to get approved or denied and can see your estimated rates and terms. You can also use prequalification tools, such as Experian CreditMatchTM, to compare and find the best offers based on your credit.

Does pre

A pre-approval offer suggests you've passed the first step in the screening process. But remember — you can't actually be approved for the card unless you apply. You may seem like a promising candidate, but the lender will likely want more information to process your application.

Is pre

See if You're Pre-Approved When a credit card offer mentions that someone is pre-qualified or pre-approved, it typically means they've met the initial criteria required to become a cardholder. But they still need to apply and get approved. Think of these offers as invitations to start the actual application process.

Can you get pre

Getting pre-approved is the first step in your journey of buying a home. But even with a pre-approval, a mortgage can be denied if there are changes to your credit history or financial situation. Working with buyers, we know how heartbreaking it can be to find out your mortgage has been denied days before closing.

Is a pre

Although mortgage pre-approval is a promise from a lender, it's not a guarantee. When you're ready to close, the lender will do one final financial check to see if your finances have changed since the pre-approval was made.