Pre-qualification is often seen as the first step in the mortgage process. This will give you an idea of how large a loan you'll likely qualify for. Pre-qualification will not affect your credit, as all information is consumer-submitted (entered manually entered by you). This includes your credit score during this stage.
Pre-approval is the next step. It is very similar pre-qualification, but it usually requires documentation and verification of your income, assets, debts and credit score. Pre-approval also means that a lender has stated in writing that you qualify for a mortgage loan. The letter usually specifies a term, interest rate and mortgage amount.