Credit inquiries refer to requests made by businesses to check on your credit. They are made to credit bureaus and the record becomes part of your credit report. According to FICO, these inquiries are classified as either hard inquiries or as soft inquiries. Each is different and it affects your creditworthiness differently. Before we look at how to remove hard inquiries from your credit report, let’s understand a few of the terminologies.
Soft inquiries are those made by you when reviewing your own credit. They can also be made by businesses that are on the lookout for new clients. These inquiries do not have an effect on your credit score and as such may not be a cause for concern.
Hard inquiries are inquiries made by lenders or businesses that you give authorization to when applying for new lines of credit. They are listed in your credit report with each appearing as a single inquiry. Inquiries made within a 45-day period are listed as a single inquiry; this usually happens when you are ‘rate shopping.’
Why should you remove hard inquiries from your credit report?
A single hard inquiry may not affect your score if your credit is good. However several inquiries with a short credit record can lower your credit score significantly. This in turn impacts negatively on your creditworthiness.
Removing a hard inquiry can increase your score by up to 5 points. Getting rid of a few of these inquiries can significantly increase your chances of being eligible for a loan and getting one at a good rate.
Removing hard inquiries from your report
Expert Tip: Under the Fair Credit Reporting Act you are within your rights to dispute erroneous hard inquiries made on your credit report.
Credit bureaus are mandated to provide accurate and actionable reports. This means that hard inquiries authorized by you will remain in your report for the natural duration which is 2 years. After this, the hard inquiries will disappear automatically.
That said, some fraudulent and erroneous inquiries can find their way into your report. These items are disputable and form the bulk of hard inquiries that you would wish to be removed from your report. Here are the steps to follow;
Step 1: Check your Credit Report
Start by getting your credit reports from the bureaus. To better identify the erroneous or mysterious hard inquiries, compare reports from the three major bureaus: Experian, TransUnion, and Equifax. Identify the inquiries from credit grantors that you do not recognize.
Step 2: Get Information on the Creditors
Using the credit report provided by the bureaus find the addresses of each creditor whose inquiry you dispute. Of the three major bureaus, Experian lists these addresses. For the others, you need to match the creditors’ addresses with the Experian report or get the info from official websites. You can also go the long way and call the 800 phone directory and ask for the creditors’ address or an official number and inquire from them directly.
Step 3: Write a Letter to the Creditors
Armed with the addresses of each creditor, write a letter notifying them of the disputed inquiries. The letter should include any documentation that supports your claims. These can be payment records that contradict the items in dispute. Request them to contact the reporting bureau that they gave the information to and have them remove the items from your records.
Step 4: Write a letter to the Credit Bureau
Write a letter to the credit bureau whose report you dispute. Clearly identify and circle the items in a copy of the credit report. The reporting bureau will carry out investigations to ascertain your claims. They will do so by collaborating with the information provider to weed out the errors. This should be completed within 30 days, after which they are supposed to remove the items in question. The removal will depend on whether your claims are found to be true, if not the items will remain in your report.
The above steps give you a 2-pronged approach to having hard inquiries removed from your credit report. One is by requesting (in writing) the company whose inquiry you dispute, to contact the credit reporting agencies and notify them of the mistake. The other is by writing to the credit bureaus and having them investigate the inquiries in question; both of which are within your rights.