How to Remove Credit Inquiries: Your Essential Guide
How to Remove Credit Inquiries: Your Essential Guide
You’ve probably heard that certain credit inquiries are bad for your credit profile, and naturally, you may have wondered how to remove credit inquiries. Let’s jump into the details, including a quick review of how credit inquiries work and a rundown of how you can remove hard inquiries.
Credit inquiries: Quick review
Any time you apply for credit, the lender will gather information about you to decide if they want to lend you money, how much, and at what interest rate.
To accomplish this, lenders will often access your credit report. Your credit report is a statement of information about your credit history and current credit situation. It contains details about current and past, including the amount you borrowed and your payment history. In addition to lenders, other entities—like employers and landlords, for example—can check your credit as part of their due diligence process.
You actually have more than one credit report. That’s because there are multiple credit report agencies (or bureaus). The major three are Equifax, Experian and TransUnion.
Credit scores are calculated based on your credit report. There are multiple companies that calculate credit scores, including FICO and TransUnion. Each three-digit score is based on a different model, so your scores might vary across providers. Lenders often consider your credit score in conjunction with your credit report.
Each time an entity accesses your credit report—“pulls” your credit—it is considered an inquiry. There are two types of inquiries:
- A hard inquiry is generated when a potential lender accesses your credit report as part of an official loan application. Hard inquiries are done with your permission and can affect your credit score.
- A soft inquiry happens when you check your own credit or when lender does a preliminary credit check to offer your pre-approval. A soft inquiry can happen without your permission or knowledge, and won’t affect your credit score.
Why worry about hard inquiries?
Soft inquiries are not recorded on your credit report and do not impact your credit score. This means checking your own credit report will never hurt your credit score—a common misconception.
Hard inquiries are recorded on your credit report and might impact your credit score. Credit scoring models focus primarily on your payment history, credit utilization ratio, and the types of credit that you have—but they also consider any new loans you might be taking out. Since a hard inquiry indicates you’re applying for new credit, it can sometimes hurt your credit score.
Credit inquiry removal: How to get started
If you’re wondering how many hard inquiries you have—and if any of them could be removed—the first step is checking your credit reports. You’re entitled to a free copy of your credit report every 12 months from each of the three major credit bureaus. Remember, checking your own credit report has no impact on your credit scores.
If you order all three reports at the same time, you can easily do a side-by-side comparison, but you won’t be able to order any more free reports for 12 months. As such, some experts recommend staggering your requests throughout the year so you can view a new report every four months.
Credit inquiry removal: Erroneous inquiries
If you find a hard inquiry that you believe is an error, you can dispute it by phone, written letter or online. The Consumer Finance Protection Board recommends that you dispute the error with the credit bureau itself and also with the company who provided the hard inquiry (known as the furnisher). If the hard inquiry is determined to be inaccurate and your report is corrected, the furnisher must notify all the credit bureaus.
If you think the erroneous hard inquiry might be due to identity theft or fraud, you’ll need to take additional steps, such as freezing your credit or enabling a fraud alert to lessen the chances of future fraudulent actions.
Credit inquiry removal: Accurate inquiries
If a hard inquiry on your credit report is the accurate result of a credit application you submitted, there’s nothing you can do to have it removed. Credit bureaus are not required to remove accurate information unless it can’t be verified.
Credit inquiry removal: How much will it help your score?
The degree to which a hard inquiry hurts your score—and therefore how much it would help to have it removed—depends on your unique situation and the particular credit scoring model. For some borrowers, the impact will be neutral; for others, a hard inquiry can knock several points off their score, so removing an erroneous hard inquiry could improve their score by a few points.
Keep in mind, too, the effect of a hard inquiry on your credit score is relatively short-lived. The hard inquiry stays on your credit report for two years, but it stops impacting your credit score after about one year.
RISE is here to help you build a better financial future. Our free Credit Score Plus tools empower you to instantly check your TransUnion credit score and receive credit alerts. You can also improve your financial wellness with our tips for creating a budget, setting saving goals and taming your debt.