Pre-Qualification Defined. Understanding Pre-Qualification Vs. Pre Approval

Pre-Qualification Defined. Understanding Pre-Qualification Vs. Pre Approval

What Exactly Is Pre-Qualification?

The expression pre-qualification relates to an estimate for credit distributed by a loan provider centered on information given by a debtor. Pre-qualifications are conditional and include the financial institution reviewing a debtor’s creditworthiness before giving a pre-approval. Loan providers generally utilize this as a marketing strategy for creditors wanting to get customers that are new specifically for things such as bank cards and mortgages.

Key Takeaways

  • A pre-qualification can be an estimate for credit written by a loan provider considering information given by a debtor.
  • Pre-qualifications are conditional and include the lender reviewing a debtor’s creditworthiness before giving a pre-approval.
  • Loan providers generally utilize pre-qualifications as an advertising strategy for creditors wanting to obtain customers that are new.
  • The creditor still needs to obtain a hard inquiry on their credit report if a borrower decides to apply for a pre-approved deal. Read more…