Can You Get Mortgage Rates Without a Hard Credit Pull?

Many mortgage lenders publish a table of their current rates on their website. But it's important to note that these are typically the bank's best interest rates at that moment in time -- they are not necessarily the rates you would get if you applied for a mortgage. In addition to your credit score, lenders also take your employment situation, your assets, your debt-to-income ratios, and other factors into consideration when determining your rate.

For this reason, when shopping around for a mortgage lender, it's important to know what interest rates you could get. However, checking your personalized mortgage rates typically involves agreeing to a credit check, which appears on your credit report and can have an adverse impact on your score.

On the other hand, some lenders -- particularly those focused on their digital experience -- allow you to check personalized rate quotes without a hard credit pull. Here's why avoiding a hard credit pull can be important, how to find lenders that offer it, and why shopping around for a mortgage rate is an important part of the process.

If you're shopping for a mortgage, click here to check out our updated list of the top mortgage lenders, some of which will allow you to check rates without a hard credit pull.

What is a hard credit pull?

In a nutshell, there are two ways lenders can pull your credit information for the purposes of prequalifying you for a loan. A hard credit check, or hard credit pull, can be thought of as a formal credit check.

On the other hand, a soft credit check can be thought of as a "sneak-and-peek" of your credit history. For example, a soft credit check is what potential creditors use to send you prequalified credit offers in the mail.

A hard credit pull shows up on your credit report, and stays there for two years. The FICO credit scoring formula has a category called "new credit" that makes up 10% of your credit score, and among other things, it considers credit inquiries you've made within the past 12 months, regardless of whether you actually opened a new credit account or not.

Can you check your mortgage rate offers without a hard credit pull?

The short answer is that it depends on the lender. Some mortgage lenders -- particularly the traditional ones like big banks -- will only give you personalized mortgage rate quotes after you fill out an extensive pre-approval application and agree to a hard credit check. On the other hand, some lenders, especially those that have a primarily online presence, will allow you to check your mortgage rates with a soft credit check.

To be clear, the lender might not specifically call it a soft credit check, but may say something like "checking your rates won't impact your credit score." That means it won't do a hard credit pull to do a rate quote.

One example is Better, an online mortgage lender that offers a variety of mortgage products and charges generally lower fees than most of its competitors. You can click here to check your rates on Better's website with a short form and with no affect on your credit score.

It's also worth noting that you don't necessarily need to limit your mortgage rate search to lenders that offer a soft credit check. It's simply a good place to start your search to get an idea of the interest rates you can expect.

The negative impact of a single hard credit pull on your FICO® Score isn't likely to be more than a few points, and it is likely to be short-lived. Plus, there's a special rule in the FICO formula that says regardless of how many mortgage rate quotes you obtain, they'll count as a single credit inquiry for scoring purposes, as long as they take place within a normal shopping period (usually defined as two weeks).

Rate-shopping is an extremely important step

When I'm asked what the worst mistake first-time home buyers make, my answer is always the same -- applying for one mortgage quote and accepting whatever rate is offered. By doing this, you could be leaving thousands of dollars on the table.

Even a seemingly small difference, such as one-eighth of a percentage point, can add up to thousands of dollars in interest savings over the term of a 30-year mortgage. So, be sure to get personalized rate and fee quotes from at least a handful of lenders before deciding.