When it comes to the qualification process, understanding the difference between pre-qualification and pre-approval can save you time, hassle, and money.
At Birchwood Credit Services, we are committed to helping you navigate these crucial steps with a cost-recovery approach.
Here’s what you need to know about each option and how we can turn your pre-qualification cost to $0.
Pre-Qualification: Quick & Simple but Limited:
- Soft Pull: A credit inquiry that doesn’t impact your applicant’s credit score.
- No Trended Data: Less dynamic picture of the applicant’s 2-year revolving credit history.
- No Triggers: Does not prompt other lenders to make offers.
- Written Consent Required: You must capture written authorization from the applicant.
- No Firm Offer of Credit: Not an official loan offer.
- Limited Use: Typically used for initial assessments.
- Non-Transferable: Cannot be shared or reused.
- Single or Multi-Bureau: Available with 1, 2, or 3 credit bureaus.
- Hard Pull for Underwriting: A more detailed credit check is needed later.
- No Cost to Consumer: This product cannot pass costs onto applicants or borrowers.
Pre-Approval: Comprehensive & Recoverable:
- Soft Pull: A credit inquiry that doesn’t impact your applicant’s credit score. Includes trended data to meet underwriting requirements.
- No Triggers: Does not prompt other lenders to make offers.
- Extension of Credit: Provides a preliminary loan offer.
- Verbal or Written Permission: Either form of authorization is accepted.
- Firm Offer of Credit: You receive an official loan offer.
- Versatile Use: Can be used with other verification solutions and various lending scenarios.
- Transferable: Can be shared with wholesale, TPO, AUS, etc.
- Single or Multi-Bureau: Offered with 1, 2, or 3 credit bureaus.
- Hard Pull for Final Underwriting: A comprehensive credit check is performed before final approval.
- Recoverable Cost: This pre-approval cost can be passed onto the borrower, at closing or via a smartpay link for $0.
Cost Efficiency: Which Option is Right for You?
Are you currently recovering your pre-approval costs? Is your compliance team concerned about how the differences in these products can impact your business?
Pre-Qualification looks less expensive on paper, but costs cannot be passed onto the borrower or the applicant, making it ideal for preliminary assessments. On the other hand, Pre-Approval may have a higher initial cost but is recoverable from the borrower, providing a firm offer and more flexibility.
Eliminate Soft-Pull and Pre-Approval Costs Completely!
At Birchwood Credit Services, we aim to provide you with the most cost-effective solutions for your credit and verification needs.
We offer unique cost-recovery-focused pricing structures based on market trends and delivered with transparency.
If you are wanting to see which product is right for you, contact our team and become a client today!
