Whenever I come across a topic that sounds new and interesting, I plan to read several contents online.
I took a similar approach for this topic and found some interesting information & facts which I would like to share.
It is a fact that hard inquiries will not have a significant impact on your credit report. However, removing the false hard inquiries is crucial when you are trying to build your credit.
Removing a hard inquiry from your credit report involves connecting with the credit bureaus or creditors. There is a possibility that credit reporting mistakes may happen, but removing them from your report will keep your credit report in tip-top shape.
It would be best if you kept this in mind – you cannot remove hard inquiries from your credit report unless it results from identity theft. However, all the hard inquiries are removed from your credit report after a couple of years (it usually drops-off).
Please note – The Fair Credit Reporting Act (FCRA) suggests credit bureaus note any hard inquiries in your credit report.
Let us now dig deep and learn each aspect one must know regarding hard inquiries and removing them from the credit report.
- What is a hard inquiry?
- Why is it essential to remove hard inquiries from your credit report?
- What scenarios can you consider when an inquiry made is a legitimate one?
- What are the steps to remove inaccurate hard inquiries from your report?
I hope the information till the end becomes beneficial for you to improve your credit report.
What is a Hard Inquiry?
A hard inquiry is often created when you plan to do some business and apply for a loan. The lender checks your credit report (one or more) and determines your possibility of repaying the debt by looking at your past debt obligations. In simple terms, they determine the risk they will be bearing while lending you money.
However, you must not confuse it with soft inquiries. Hard inquiries and soft inquiries differ in two ways.
- Hard inquiries are a result of credit report checks when you apply for a loan, credit card, or other financing. However, soft inquiries are made by you when you wish to review your credit report. It may also occur without your knowledge when lenders send you a preapproved offer after checking your credit report.
- Hard inquiries stay in your credit report for two years. It will not affect your credit score every time. It affects it once when the entry is made. On the other hand, soft inquiries do not affect your credit score.
Please remember that you might check with multiple lenders to get the best possible rate whenever you apply for a loan (suppose, say car loan).
In such a case, each vendor will check your credit report. However, it is considered rate shopping, and it will affect your credit report & score once in 14 days (days for which credit reporting companies will consider it a single inquiry).
This discussion leads me to answer your next question: Why should someone remove hard inquiries from their credit report?
Why is it Essential to Remove Hard Inquiries From Your Credit Report?
There are credit checks made by lenders whom you know and the reason for the review. However, what if there are entries that are not legitimate? What if the entries do not remind you of any known company? Hence, I have tried to answer all these questions in this section.
If you learn that removing hard inquiries from your credit report helps you improve your credit score, you may find it exciting.
However, you may suffer from a MondayBlues when you realize that disputing a genuine hard inquiry will never help you improve it.
Hence, it is essential to understand which entries must be considered authentic and which ones are not.
Differentiation Between Authentic and False Hard Inquiries
1. Suppose you have hired an authorized home repairer and provided your social security number. In case if they make a hard inquiry for any financing reasons, such inquiries are genuine.
2. Suppose you plan to purchase a car on loan, and dealers send the query across multiple lenders to get the best rates. In such a case, you might find various hard inquiries made by different unknown companies.
However, a platform like Experian provides you with the required contact details. You may connect with the user and find whether it was authentic or not.
(As said, it will not be affecting your credit report & score more than once. It will be considered as rate shopping.)
3. Suppose you plan to apply for a retail credit card in outlets like Starbucks. All these retail businesses are connected with other banks to provide you with a credit card.
You might find an entry of a hard inquiry made by these banks. However, these inquiries might be considered genuine ones.
4. Suppose you find an entry made by some unknown user and falls into the unauthorized category (there is no way you can connect with the user), then you may consider it a false hard inquiry. It may be the result of an account created using your information like name & SSN.
Hence, I can say that when you find an unrecognized hard inquiry, it is essential to remove it from your credit report. I hope everything is clear until now.
How to Remove Hard Inquiries From your Credit Report?
I found an exciting way to demonstrate the whole process. I thought of dividing the entire process into four steps. These steps are essential or mandatory, I suppose.
1. As mentioned in the Fair Credit Reporting Act, all individuals have the right to check their credit reports for free, made by credit bureaus.
You can pull your credit report once a year from AnnualCreditReport.com. However, it is now extended to weekly due to Covid19 until April 2022. Hence, you must keep checking your credit report regularly.
2. Once you have received your report, you must check the section that lists all the hard inquiries.
You must scan all the entries and find the inaccurate entries. It may be a false hard inquiry, which results in affecting your credit scores.
Make sure that you report this false inquiry to credit reporting agencies in the form of a credit dispute letter. There are a couple of reasons why you must dispute.
3. When you are planning to pursue a loan and have just inquired, the lender may check your credit report without your knowledge. Such inquiries can be treated as false ones and must be removed.
The inquiries that give you a sign of fraud must be removed too.
4. Once you dispute, the credit reporting agencies will review it, investigate it, and if found genuine, they will remove it from your credit report.
Once you submit the request to remove the false hard inquiries, the process might take up to 30 days.
If your dispute is not genuine, the inquiries will still be reflected in your credit report, and it falls off a couple of years later.
It is a good habit to check your credit report regularly. There are several instances when a human eye misses out on information that is not genuine while reading much stuff. Such cases are possible when you review your report once a year.
The false entries would have affected your credit score & credit report overall, but since you didn’t check it, the entries will remain as it is, and fall off in a couple of years.
If not weekly, you must check your credit report quarterly. While growing with this habit, you are crediting your efforts in building a positive credit report.
You may sign up for free credit reporting tools and ask them to notify you whenever an entry is made in your credit report. Signing up on such tools will keep you posted regarding any new entries made in real-time.
It is not possible to remove genuine hard inquiries from your credit report. However, you can create a dispute for unauthorized hard inquiries and request credit reporting agencies to remove it.
Hard inquiries have a minor effect on your credit scores. Additionally, it stops affecting your credit score one year past the entry date. However, you might see a slight fluctuation in your credit scores if the entry is removed.
This seems to be an unrealistic expectation. However, there are chances of getting it removed in 24 hours. You can connect with the credit bureaus on call and request them remove the false inquiries from your credit report.
Six or more hard inquiries can be considered a risk to your credit report, except for rate shopping, where you might find multiple entries in a short span.
The hard inquiries will remain in your credit report for two years since its listing date.