How to Remove Credit Inquiries from Credit Report

Written by Robert Ferry on June 13, 2020
How to Remove Credit Inquiries from Credit Report

If you've been a client of a credit company and have applied for a loan or a credit card, you'll likely experience the possibility of a credit inquiry appearing on your report.

Essentially, when you borrow some money or applying for a credit card loan, the lender would want to get some form of information from you.

The lender usually gets information through a credit inquiry.

So why is it indispensable to watch the number of credit inquiries in your report?

Having a massive number of such inquiries could affect your credit score, and it's imperative to have a grasp of how it works and how to eliminate unauthorized or inaccurate inquiries from your report.

Categories of a credit inquiry

There are two significant categories of credit inquiries that can appear in your report: hard and soft.

Generally, a hard inquiry can be the critical ingredient for underwriting whatever form of credit.

A soft inquiry, on the other hand, is utilized for marketing purposes and is not just limited to the loan application and approval process.

It's imperative to understand the differences between these two inquiries to make tailored decisions and avoid severe effects on your credit score.

Hard inquiry

When you apply for a new credit card or the usual loan, the lender usually checks at least one or more credit reports to understand whether you're worthy of receiving the credit.

This process is a hard pull or a hard credit check.

The significant disparity between hard and soft inquiries is that hard inquiries apply exclusively during the loan application and approval process.

Soft inquiries, on the other hand, work when you submit a request to check your credit report – and often happens without your consent when the creditors check your account history before sending you a pre-approval offer.

The second difference between these two types of inquiries is that the soft inquiry does not affect your credit score, while the hard inquiries can tank your credit score significantly.

A hard inquiry shows your level of financial freedom – and a few points could display to the lender that you're financially unstable and translates that you are a high-risk borrower.

Hard inquiries naturally fall from your credit reports after two years, but you certainly don't want to suffer the consequences within these 24 months.

Keep in mind that while a significant number of hard inquiries can tank your credit score, not all of them will naturally impact your score.

This disparity, however, depends on the type of loan you're applying for.

As long as you apply within two weeks, your lender might evaluate your creditworthiness based on a category that suits you well.

Different lenders determine what type of inquiry they want to check.

Those that would typically use your hard inquiry include:

  • Vehicle financing firms
  • Mortgage companies
  • Student loans
  • Personal and business loans and,
  • Credit card providers

When a lender is evaluating the hard inquiry in your report, the information the creditor would check includes the following:

  • The number of previous inquiries present in your report
  • The elapsed time since you last had a credit inquiry and
  • The number and proportion of accounts you recently opened

Such information is critical to help the lender evaluate your credit history and decide whether or not you are creditworthy.

Soft credit inquires

While hard inquiries require you to effect some action, "soft" inquiries do not need your consent.

If you can recall the last time you applied for a loan and the mortgage company or employer got a report about your account without asking for your permission, then what they were doing was a soft inquiry.

Soft inquiries may be requested for different reasons.

One significant way that loan issuers use soft inquiries is to market their services to potential customers.

So why would someone extract confidential information from your credit report and use it as a hook for potential clients?

Well, the answer to this is pretty straightforward.

If a credit company, for instance, may want to send an offer to several people who've attained some minimum threshold for getting credit, they might use this information to help potential borrowers get credit.

Other entities that may use soft inquiries include credit aggregating services that also help customers find a suitable loan for them.

Such entities generally require information from potential borrowers such as the Social Security Number (SSN), address, and contact information.

There are different reasons why a company might want to pull a soft inquiry from your report, and the common ones include:

  • Identity verification by banking and non-banking financial institutions (NBFI)
  • When you want to lease a vehicle, the car rental agencies might want to perform a soft inquiry
  • When you're a new customer to phone, utility, and SaaS companies that offer post-paid services
  • A realtor or landlord when you apply for an apartment. This check usually applies to residential and retail real estate
  • An organization checking your information when you're a new employee
  • A credit card company that is performing an approval process to clients before sending them an offer.

In addition to the scenarios listed above, your current loan issuers might want to perform a sift inquiry when you want a loan increment, top-up, or applying for a new one.

One exciting way that you can count as a soft inquiry is the check that you do yourself on your credit report, which you can do by visiting Credit Sesame or Credit Karma.

Remember that, unlike the hard credit inquiry that requires your authorization, this form has no impact on your credit report and can occur without your consent.

Comparison: hard and soft inquiries

There are key differences between these forms of credit checks.

First, the type of information displayed in a hard credit report is different from that in the soft inquiry.

For instance, if an entity or loan issuer is performing a check for promotional or marketing purposes, it will use your hard report to perform this action.

The most noteworthy difference is that the hard inquiry can affect your credit score while the soft inquiry has no impact. Although soft inquiries might be noted in your report, they cannot tank your credit score, and neither would it show up as a negative.

The second difference is that, for someone to perform a hard inquiry, they should have your consent whole, a soft credit inquiry doesn't need permission, and you wouldn't dispute it if a company retrieves it.

Why credit inquiries could plummet your credit score 

Whether or not your credit score drops depend on the type of inquiry you have.

A hard credit inquiry could significantly affect your credit score and entirely bring it down since it paints you as a risky borrower, especially if you have considerable balances or vast amounts of loans.

While there are cases where negative items stay in your report for almost a decade, it is common for such hard inquiries to remain for only two years.

Typically, a hard inquiry removes close to 5 points from FICO (a credit company that works on credit scores) – that has a range of credit scores spanning from 300 to 850.

When taken into consideration (usually happens most of the time), it accounts for close to 10% of the points in your score, which is quite a considerable percentage.

A detailed analysis of FICO reveals that the company only considers inquiries that have been there for the past year before determining your credit score.

It also determines the periods you've been looking for the best rates and combines all queries into one report – as long as they have closely-related data.

This period varies depending on the lender, though it usually ranges from one to seven weeks before the generation of the score.

Why loans issuers consider hard inquiries

Inquiries indirectly reveal what the type of borrower you are.

Potential lenders will use this information to predict whether you are creditworthy or not if you've been looking for high-quality loans with favorable interest rates.

FICO reported that people with over six inquiries in their reports are more likely to declare bankruptcy than those with less or no queries.

This factor makes the most significant reason creditors consider the number of inquiries in your report when calculating your credit score – and it helps them a great deal when making approvals.

As a cosigner, do credit inquiries affect you?

When making a loan application, some companies may demand that you have a cosigner for them to make an approval.

If your credit report has hard inquiries, your credit report will affect the cosigner's score.

This happens because, as a cosigner, they accept to take full responsibility for the loan. If the borrower fails to pay or defaults consistently, the two (borrow and cosigner) will bear responsibility, and such inquiries could tank their scores.

The data about the loan or account will show up on your report and the other person's report if you're co-signing someone else.

So if you have to help someone get a loan, you should understand the associated repercussions should the person default and make sure that you know their financial history before committing yourself.

Should you remove hard inquiries?

Eliminating hard inquiries from your credit score sounds incredible, and it has a mammoth of perks, but you need to follow a series of steps.

Disputing a legitimate inquiry from your report can be daunting, and you wouldn't be guaranteed of any changes.

It is, however, possible to dispute inquiries that showed up from any fraudulent activity. There are instances where customers claim to be victims of identity theft, where information such as Social Security Number (SSN) was used to open an account bearing their name.

While one hard inquiry may affect your score by a handful of points, it doesn't mean that creditors will reject your application based on that single occurrence.

The impact that the inquiries may have on your report may last just a couple of weeks, but having a colossal number of such inquiries may cause more severe issues when applying for new credit.

What form of inquiries can be eliminated from your report?

Is it possible to delete hard checks from your report?

Well, soft inquiries do not tank your credit score – so most people could arguably conclude that it can stay in their reports without causing much damage.

However, as much as soft inquiries don't affect your credit score, they could influence most loan issuers.

Like every item in your report, if something is legitimate and within its expiry date, you cannot legally eliminate the inquiry.

If you, for instance, apply for a credit card and your application flops, you might think you're legally allowed to eliminate the inquiry since nothing happened.

This may sound unfair, but if you look at it from the creditor's perspective, you'll understand the value that this type of information has to the lender.

Applying for a credit card, then being rejected speaks a lot about your creditworthiness. In other words, if you had a good payment history with the lender, they would have undoubtedly accepted your application.

Generally, this information helps the potential lender evaluate your creditworthiness, although there are cases where such information can be removed. If your identity were stolen, you'd have every right to dispute those inquiries and remove them from your report.

Identity theft is one of the most significant downsides in the credit landscape and is one of the main reasons you should get well-versed with what's in your reports.

Some people have reported severe damage to their overall financial health due to identity theft or human errors, but it's possible to resolve them quickly.

Close to 25% of credit reports have errors, which makes it essential to check before beginning the removal process.

Frequently checking your credit report

It is common to encounter errors and inaccurate information, which is probably the main reason you should check for inaccuracies.

Before disputing for the removal of an inquiry, you should pull the report from the three bureaus – Transunion, Equifax, and Experian – and keep an eye on your credit score that could probably drop due to fraudulent activity.

While it's not possible to prevent identity theft entirely, checking your reports can be an excellent way to keep cybercriminals at bay.

Disputing hard inquiries 

If you've checked your report in detail and believe that the hard inquiry emanated from identity theft, the best solution is to file a dispute with the three credit information centers and requesting them to remove the information from your report.

Using the dispute center, review your credit report, verify your information, and confirm that the inquiry is not a result of identity theft.

It is normal to forget the name of the company that pulled an inquiry or issued a loan a couple of years ago. While many situations might make you consider the inquiry as illegitimate, here are some instances common to many people:

  • When you were buying a car, the car dealer might have forwarded your loan application to several lenders to find the one that suits you best. Multiple inquiries with different names might appear, but if they are collated within a specific time frame, the credit company might recognize them as a single inquiry.
  • You might have hired a home repair service that requested your social security number (SSN), and they might have had the authorization to check your credit before approving your application.
  • One instance that a hard inquiry may look like a fraud is credit cards. If you apply for a credit card loan, national retail stores might utilize financial service companies for their cards, and when they make inquiries, unfamiliar names might appear on your credit report.
  • Mortgage or residential applications could also lead to such an occurrence. If you make online inquiries and forward our request to several realtors, they might want to check your credit report before approval. The creditor might have reviewed your report on behalf of the real estate company, and this scenario may add inquiries unfamiliar to you.

If you don't identify the company that inquired, reach out to them for further information. The Experian dispute center, for instance, shows the company name and contact details, which provides an incredible avenue for you to reach out to them.

Preferably, you should use certified mail to avoid possible treatment as spam.

Keep in mind that if the inquiry is a result of identity theft, you can reach the specialists via phone or log in to their dispute center to select the best dispute option.

Typically, a dispute takes close to a month, and you can track the progress using their dispute center.

If the credit information center finds the inquiry legitimate, it will likely stick to your report.

Still, if their investigation reveals that it was a result of identity theft, they would undoubtedly remove it from your report.

Deleting legitimate inquiries

While this may look like a daunting process; removing queries from the application you made is possible.

Credit information centers are obligated to provide accurate information and a proper reporting limit, and you can't just decide to remove an inquiry because you no longer want it there.

However, when compared to other items that tank credit scores, inquiries should be the least of your worries.

One way is sending a certified mail to the loan issuer and make sure to point out that the inquiries weren't authorized, then ask them politely to remove them from your report.

The second option is contacting the three information centers if the inquiry was unauthorized.

You should note that the information centers have different information, which means the investigation can show up in one or two bureaus – not necessarily all three.

In whichever case, attach supporting documents and keep any correspondence documents.

Writing the letter

You should include precise, tailored information when submitting your dispute. There have been cases of people copying and pasting prepared templates, which could be a red flag to specialists reading the letter.

The information you should include is as follows:

  • Your full official name
  • Address
  • Phone number
  • Name and address of the lender
  • Date of application

Start by explaining how you retrieved the credit report and realized that there was an unauthorized inquiry.

State that the inquiry has detrimental effects on your score and affects your ability to get good quality loans and favorable interest rates.

The next step is showing the level of urgency of the removal. You should possibly use words like "I have sent this letter via certified mail since it requires your prompt attention with regards to the mentioned subject."

Remember to attach any relevant documentation and request them for a prompt reply in your closing remarks.

Besides sending the letter to the loan issuer, it would be helpful if you attached a copy of where the inquiry showed up.

Preventing unauthorized inquiries

There are also several ways you stop credit inquiries from happening, which means you won't have to go through the removal process in the future.

One strategy that works with efficacy is rendering the report inaccessible by creditors using a "credit freeze."

This freeze, commonly known as a security freeze, means that the lender wouldn't be able to access your information.

This strategy can also keep cybercriminals at bay since they won't open new accounts or apply for loans under your name.

However, applying this security freeze can prevent you from getting new credit. For this reason, the three credit bureaus have the provision for temporarily or permanently lift a credit freeze.

Conclusion

Good credit is a critical success factor for getting good quality loans, credit cards, and favorable interest rates.

This is probably the top reason you should strive to have updated and accurate information in your report to offset the possibility of future credit issues.

Keep in mind that while soft inquiries might not hurt your financial report as much as hard inquiries, they can affect the creditors' decision-making process.

The best way is to maintain an excellent financial history and frequently check your credit reports for any delinquencies.

Article written by Robert Ferry

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