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.
- 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.
Exactly Exactly How Pre-Qualifications Work
Pre-qualifications are popular advertising strategies employed by numerous creditors to entice new and customers that are existing submit an application for credit items such as for instance loans, bank cards, and mortgages. In many situations, pre-qualifications are unsolicited provides for credit. This technique provides these customers some access that is preferential a credit application.
Lenders utilize current information supplied by customers. This might be from information supplied in an application that is previous considering that the customer has already been a client.