A credit inquiry is a request for one’s credit information from a credit reporting agency, usually done by financial institutions. Credit bureaus will request you to authorize inquiries because they could take points off your credit score. Ensure that the information on your credit report is accurate.
- Hard inquiries affect your credit score, while soft inquiries don't.
- You can access free credit reports from the three major credit bureaus at least once every 12 months.
- Disputing an unauthorized credit inquiry can result in a credit score change.
- Not all suspicious inquiries are fraudulent.
The information on your credit report affects your financial life in various ways. It impacts your ability to borrow money and the amount of interest you’ll pay to borrow. It may also affect insurance premiums, asset purchases, and your ability to get a job. Learning about disputing credit inquiry is important because you may find a suspicious inquiry on your credit report.
Disputing Credit Inquiry
We have two types of credit inquiries:
- Soft inquiries: They do not affect your credit score.
- Hard inquiries: They affect your credit score.
Financial institutions can conduct a soft credit inquiry to check your credit standing. It is an approved credit check for various purposes, but not to approve an application for new credit. A soft credit inquiry can take place when:
- You check your credit score or request your credit report
- As part of the pre-approval process conducted by a lender
- A credit monitoring service evaluates your credit report after suspicious activity
- A potential employer checks your credit reports
A hard inquiry happens when a lender asks for your credit report from a credit bureau to approve your loan application. There are three major credit bureaus in the USA; TransUnion, Equifax, and Experian.
Lenders conduct hard credit inquiries to determine your creditworthiness and the risk involved in lending you. It can be a mortgage, personal loan, auto loan, or credit card. Most lenders will seek permission to conduct a hard inquiry because it impacts your credit score. Avoid authorizing too many hard credit checks in quick succession.
When Can a Hard Inquiry Happen?
Hard credit inquiries can happen when:
- You apply for a credit card or bank loan
- Applying for a new utility connection
- A collection agency tries to find your credit information
- You want your credit limit increased
How to Check Credit Inquiries
Anyone in the US can access their credit reports freely from the three major credit reporting agencies at least once every 12 months. You can access the information from AnnualCreditReport.com.
While each credit bureau has a unique website interface, you can easily find the credit inquiries that may affect your credit scores. Ensure the information about inquiries is correct and all hard inquiries are legitimate.
You may not recognize some entries because:
- You may be a victim of identity fraud, with someone using your personal information (name, social security number, bank account number, or credit card number) to open fraudulent accounts.
- A car dealership may have submitted your application to several lenders trying to find the best offer for you. If these inquiries fall within a few weeks, they can be viewed as rate shopping and count as a single inquiry.
- A debt collector may check your credit information as approved under the Fair Credit Reporting Act.
Filing a Fraud Alert
If you suspect a case of identity theft, file a fraud alert here to ensure that applications to your credit reports will undergo intense scrutiny. You can alert one credit bureau, and it will alert the others. You can also apply for a credit freeze from the bureaus so that nobody will open new credit under your name.
Disputing Inaccurate Hard Inquiries
If you want the errors in your credit reports corrected, you can file a dispute with any of the three bureaus that show the error in the corresponding report. You may submit the credit dispute online or send it by mail. Every credit bureau has a dispute form that you must fill out.
During the dispute process, provide accurate contact information and explain the error in writing and why it is wrong. You can visit the CFPB website for some sample letters. Ask the credit bureau to remove the inquiry and incorrect information. Attach copies of documents that support your request.
Remember to keep copies of the dispute letter and use a certified mail service—and request a return receipt. The credit reporting agency will investigate and correct any information found to be incorrect.
What Happens When You File a Dispute?
The credit bureau takes up to 30 days to investigate the dispute. The bureau also shares your supporting documents with the business that reported your information. The business will conduct its dispute investigation and submit a report to the bureau.
If the business finds the information inaccurate, it must notify all three credit bureaus to correct it.
The bureau will give you the dispute results in writing. If the investigation resulted in a credit score change, you would receive a copy of your credit report with updated information. The copy doesn’t count as your free credit report.
Be Sure of Every Hard Inquiry
Not every suspicious hard inquiry will mean there’s an identity theft case. Remember to write to your bureau if you notice an error. Follow the right steps to dispute errors, and the bureau will investigate and inform you of any changes.
Does Disputing Credit Inquiries Work?
Yes, disputing credit inquiries works. However, they must be unauthorized hard inquiries. Your credit scores will stay the same if you dispute legitimate hard inquiries.
How Can I Get Inquiries Removed From My Credit Report?
You can get inquiries removed from your credit report by filing a formal dispute. Note that the inquiry will only be removed after the credit bureau conducts an investigation and finds it unauthorized. If you authorize the inquiry on your credit report, it will stay on your credit file.
How Do I Dispute a Credit Report Inquiry?
You can dispute a credit report inquiry by submitting a dispute request with supporting documentation to the bureau that included an error in the report. Always use a certified mail service and retain copies of all documentation and the return receipt. The bureau will conduct an investigation and provide feedback.
Are All Suspicious Inquiries Fraudulent?
Not all suspicious inquiries are fraudulent. If you buy a car through a dealership or get a mortgage broker for your house, they can submit your application to multiple lenders in search of better deals. All lenders can conduct credit inquiries as they probe your credit history. However, they will be viewed as rate shopping and count as one inquiry.