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How to Dispute a Hard Inquiry on Your Credit Report

Dec. 12, 2016
Credit Score, Personal Finance
how-to-dispute-a-hard-inquiry-on-your-credit-report
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If you’ve checked your credit reports, you may have noticed you’re not the only one taking a peek.

  • Credit card issuers and lenders check your credit history to gauge risk when you apply.
  • Utilities use them to decide whether to charge you a deposit.
  • Companies may check your credit standing so they can market products to you.
  • Potential landlords and employers may look to see how reliable you are.

Inquiries stay on your report for two years, but not all of them affect your score. Here’s what you need to know about when and how to remove a hard inquiry from your credit report.

How to find and evaluate inquiries

You can get free credit report information on demand from some personal finance websites, such as NerdWallet, or you can request your free annual reports direct from the credit bureaus. In either case, look at the section labeled “inquiries.”

You’re concerned with hard inquiries, the kind that happen when you apply for credit. Those can cause a small, temporary drop in your score. Soft inquiries, such as when you check your own credit or a marketer buys data from a credit bureau, don’t affect your score.

Each credit bureau or website presents information in its own way, but all will label any inquiries that might affect your score. If you don’t recognize something, it’s worth investigating. Reasons you might not recognize the entry range from benign to worrisome:

  • A store credit card you applied for may be issued through another financial institution.
  • Your car loan application may have gone to multiple lenders (a single authorization at a dealership can sometimes result in several inquiries).
  • Debt collectors are allowed to check credit under the Fair Credit Reporting Act, although most often these are soft inquiries.
  • You may have fallen victim to identity theft and someone is opening fraudulent accounts in your name.

What to do if you spot a problem

If you can’t trace the reason for a hard inquiry or you believe it was done without your consent, you can dispute it online. If the credit bureau can’t confirm it as a legitimate inquiry, it’s required to remove it. Contact each credit bureau individually:

If you believe the inquiry was fraudulent, you can choose to have a fraud alert added to your credit reports, which flags applications in your name as requiring extra scrutiny. Alert any one credit reporting agency; it will share information with the other two.

Don’t worry about the rest

Legitimate hard inquiries can ding your credit score, but not by much and not for long. “Hard inquiries … represent potential new debt that doesn’t yet appear in the credit report as an account,” says Rod Griffin, Experian’s director of public education.

“Typically, any impact drops off dramatically after a month or two,” Griffin says, either because you did not add the debt, so there’s no risk, or you did open an account and it’s now wrapped into other credit factors.

Some companies say they can remove even legitimate inquiries from your report — for a fee — but NerdWallet advises against using them. As long as you’re not continuing to pile up applications, time will repair any damage to your credit.

Griffin advises keeping perspective, because other things influence your credit score more (namely, paying bills on time and using less than 30% of your credit limit).

“Hard inquiries alone will never be the reason a person is declined” for credit, he says. “Inquiries may be the proverbial straw that broke the camel’s back, but they will not be the entire bale of hay.”

Bev O’Shea is a staff writer at NerdWallet, a personal finance website. Email: boshea@nerdwallet.com. Twitter: @BeverlyOShea.