Need for Credit Checks
Currently, many clients ask whether a “hard credit check” is necessary to get pre-approved for a mortgage. Our specialists explain that it’s important to fully understand your credit profile and all relevant details. This allows us to verify the information in advance and prevent potential issues from the very beginning.
Our statistics show that at least 10 percent of cases involve some type of error in credit reports. At LBC Mortgage, we work to identify and resolve these issues before our clients make an offer. This way, we can evaluate the situation ahead of the lender’s review and make any necessary corrections before submitting the mortgage application.
Hard Credit Checks
Hard inquiries, or “hard pulls,” are completed by mortgage brokers, financial institutions, utility companies, or credit card issuers when checking your credit as part of the application and decision-making process about whether or not to lend you money.
These inquiries can lower your credit score if too many inquiries are made in a short period of time. Credit agency algorithms are generally fine with about 2–3 credit pulls per year and prefer not to see more than this. Note that mortgage brokers pull your credit only once and can share your report with an unlimited number of lenders.
Many clients make the mistake of allowing several parties to complete hard credit checks. Don’t do it—gather all the information you need first, and once you’ve decided which car or credit card works best for you, have one team perform a single hard credit check.
Soft Credit Checks
Soft inquiries, or “soft pulls,” are typically carried out when a person or company reviews your credit as part of a background check. Soft inquiries do not affect your credit score like hard ones.
Some of the inherent benefits of soft credit reports are that they are less expensive, do not trigger spam or solicitation phone calls, and have no negative impact on FICO scores. The downsides of soft credit reports are that some data may occasionally be inaccurate, the information can have a longer lag time, and certain reports or findings may not be available. It is also worth noting that a hard report will ultimately be required once the loan is scheduled for underwriting.
So, the main difference comes down to the purpose and impact of these credit checks. Soft credit checks are useful for estimates and overall planning. They don’t affect your credit score and are often used during pre-qualification. In contrast, hard checks are used for final approval, can slightly lower your credit score, and are visible to other lenders. At LBC Mortgage, we use both types strategically based on your needs and goals. Our approach is to strike the right balance between protecting your credit and moving your loan application forward efficiently.
When Each Type of Credit Happens
Soft credit checks usually take place at the very beginning, when borrowers need to better understand their options. They help give a clear picture of your overall situation and how lenders may view your credit. Hard credit checks come later, once you submit your final application, and are required for approval.
Some borrowers may worry about hard inquiries and their impact on credit. While they can have a slight effect, they are a necessary step in securing a loan. At LBC Mortgage, our team carefully times this process to minimize any negative impact. We help you prepare in advance, assess your situation from multiple angles, and maximize your chances of approval.
Throughout the mortgage process, it’s important to manage your credit responsibly. This means avoiding new accounts or additional loan applications. In most cases, it’s best to keep your credit card balances low and continue making payments on time, as this strengthens your financial profile and supports a successful loan approval.
Why Working with the Right Mortgage Broker Matters
Not all mortgage professionals handle credit checks the same way. Poor timing or excessive inquiries can negatively impact a borrower’s credit score and slow progress toward approval. At LBC Mortgage, we begin with a soft pull whenever possible. Our specialists only move to a hard check when you’re ready.
We also help you understand the lender’s perspective so you can make any necessary adjustments in advance. As a broker, we compare a wide range of loan options and select the one that best fits your needs and preferences. If you’re planning to buy a home, our team is ready to help you turn those plans into reality.
