To verify your information
Your credit information, to be more exact. Lenders use your SSN when they conduct a “soft” credit inquiry to check that the information provided by your credit bureau is correct. And if you decide to officially submit a loan application, you’ll be asked to provide your SSN a second time in order for them to conduct a “hard” credit inquiry and finalize your application.
In both cases, lenders match the credit reports with the SSN you provided to verify that this is the same person and that the credit information is accurate. Because your credit history reflects your financial reliability, and consequently which loan options you can qualify for, your SSN is a crucial part of the loan application process.
To prevent fraud
Often when people commit mortgage fraud it’s through identity theft, the use of someone else’s SSN and other personal information to acquire a loan. Scammers typically gain this information by offering new homeowners a so-called special, limited-time loan offer by email or phone call. All they ask for in return is your name, address, date of birth, and social security number.
Lenders ask for your SSN in part to verify that you are you and not a scammer in disguise. Before making a loan offer, they will scour through your credit report for any discrepancies or inconsistencies.
If for any reason you feel that there’s a risk with providing your SSN, you can check with the Better Business Bureau’s scam tracker tool. They list websites, keywords, and phone numbers that have been tied to cases of identity theft and fraud.
