Does an AIP Affect Credit Score

Find out if an Agreement in Principle affects your credit score in the UK, and how to avoid credit score damage when applying for a mortgage

Does an AIP Affect Credit Score

An Agreement in Principle, also known as an AIP or a Decision in Principle (DIP), is a key step in the mortgage process. It gives you an indication of how much a lender may be willing to lend based on your current financial situation. But if you’re planning to apply for a mortgage or explore your options, you might wonder: does an AIP affect your credit score?

The short answer is it can, but not always. Whether an AIP affects your credit score depends on how the lender performs their checks. Some carry out a soft search, which has no impact, while others perform a hard search, which can temporarily lower your score.

In this article, we’ll explain how AIPs work, the difference between soft and hard credit checks, and what you can do to protect your credit score during the mortgage process.

What Is an Agreement in Principle

An Agreement in Principle is a conditional offer from a mortgage lender that indicates how much you might be able to borrow. It is not a formal mortgage offer but is useful for:

  • Understanding your budget when house-hunting

  • Showing estate agents and sellers you’re a serious buyer

  • Speeding up the full mortgage application later on

To get an AIP, you usually provide:

  • Basic personal details

  • Income and employment information

  • Details about your expenses and debts

  • Permission for a credit check

Most AIPs are valid for 30 to 90 days and can be renewed if needed.

Do Lenders Run Credit Checks for an AIP

Yes. Lenders usually carry out a credit check when you apply for an AIP, but the type of check they perform matters:

Soft credit check

  • Does not affect your credit score

  • Only you can see it on your credit report

  • Used by many high street lenders and brokers

  • Ideal if you’re shopping around or comparing offers

Hard credit check

  • May lower your credit score slightly

  • Visible to other lenders on your credit report

  • Used by some lenders to make a more in-depth assessment

If you’re unsure which type of check will be used, always ask the lender or mortgage broker before proceeding.

How Much Can a Hard Search Affect Your Score

A hard search typically causes a small, temporary dip in your credit score, often by 5 to 10 points. This is rarely significant if you only apply once. However, if you apply for multiple AIPs from different lenders in a short period, the cumulative effect of several hard searches could impact your ability to get approved later.

Some lenders may view multiple recent hard checks as a sign that you are struggling to get approved for credit, which can raise red flags during a full mortgage application.

How to Avoid Credit Score Damage from an AIP

To protect your credit score while seeking an AIP:

  • Ask if the lender uses a soft or hard check before applying

  • Limit the number of AIPs you apply for to avoid multiple hard searches

  • Use a mortgage broker who can compare offers without running several hard checks

  • Check your own credit report in advance using a soft search tool such as Experian, ClearScore or Credit Karma

  • Ensure your financial details are accurate to avoid unnecessary reapplications

Real-World Example

Charlotte applied for an AIP with a major UK bank, which used a soft search. Her credit score remained unchanged, and she later received a formal mortgage offer without issue.

In contrast, Jake applied for AIPs with three different lenders in two weeks. Two of them performed hard credit checks. Although his score only dropped slightly, his mortgage broker advised waiting a month before applying formally to avoid any negative impression during underwriting.

Will an AIP Show on My Credit Report

If the lender uses a soft search, the AIP will not be visible to other lenders and will not affect your score. You will see it listed on your own report, but it is for your reference only.

If the lender uses a hard search, it will appear on your report under credit searches and remain visible for 12 months. This type of search can be seen by other lenders and is taken into account when assessing future credit applications.

Final Thought

An Agreement in Principle can affect your credit score, but only if the lender uses a hard credit check. Many lenders now use soft searches for AIPs, which allow you to explore your options without risking your credit rating.

To stay on the safe side, ask your lender which type of check they perform before applying. Be selective with your applications and keep your financial details accurate and consistent. When used wisely, an AIP is a helpful tool in the homebuying process that doesn’t have to damage your credit score.