Easy Goes It
Contrast the Pre-Approval to a Pre-Qualification. A Pre-Qualification is fundamentally based on a verbal exchange of information related to a potential borrower’s income and assets. In some cases, the lender may attain permission to run a credit report and review. Some lenders may decide not to pull a credit report until the borrower is ready to commit to begin a mortgage application process. They will base Pre-Qualification on a credit score you represent. With most credit card companies now providing your credit score complimentary on a monthly basis, some borrower’s may be aware of a representative number of what the mortgage lender should expect.
One small note of caution; mortgage credit is based on the middle score of the 3 repositories and most credit card companies only supply one score from a single repository. Additionally, consumer credit scoring models may vary slightly from mortgage credit scoring models, so be aware should you experience different numbers coming from the same reporting organization or repository (TransUnion, Experian, or Equifax).
The amount of credit or number of active trade lines on your credit could be important as well. Most mortgage loans have criteria associated with having a certain number of active trade lines in order to support the credit score, even though repositories can generate credit scores with minimal trade line or credit activity.
