Unauthorized inquiries can hurt your credit score - and they're surprisingly common. Here are the errors to look out for and how to remove them.
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Contrary to popular belief, checking your own credit report or score will NOT impact your credit—period. There are two ways to review your credit: checking your credit score or getting a comprehensive credit report. But only your full credit report can help you identify false credit inquiries or other mistakes. See how below. Checking Your Score:
You can check your credit score several different ways. Banks like Chase and Wells Fargo enable their customers to review their scores through their online account profile. Several websites also offer this service, including CreditKarma and Credit Sesame.
How does my credit score compare? Credit scores range from 0 and 850. A score above 700 is generally considered "Good," but the average credit score is currently 673. Your credit score can be improved over time.
How often should I get a credit report?
Federal law allows you to receive a free copy of your report from each credit bureau once every 12 months. It's recommended that you look over your report at least once per year. It's a good idea to get a report anytime you see a questionable change in your credit score. Additional reports can cost you between $12 and $18.
Why does a hard inquiry impact your score? The number of hard inquiries on a report is partially used to calculate how much financial risk you hold.
Each inquiry is basically a record of you saying, "I want this thing now, and I promise to pay you back later." The more you say that, the likelihood of you being able to keep your promise decreases—and therefore so does your credit score.
A removal letter is a formal request to the credit bureaus to have an inquiry wiped from your record. You can only submit a removal letter for false or unauthorized inquiries—any inquiry you did authorize will stay on your record. The removal letter follows a specific format and should be typed, NOT handwritten. Here's a template you can follow:
Your Name
Your Address
Your Phone Number
Your SSN Credit Bureau (Equifax, TransUnion, or Experian)
Credit Bureau Address Date
RE: Request Investigation of Credit Inquiry Dear Sir or Ma'am, After reviewing my credit report from [insert report bureau], I have noticed that the report shows [insert number] credit inquires that I did not authorize. [Detail each inquiry. Include the company name, the date of the inquiry, and the reason you believe the inquiry is false. Do this for each inquiry in question. Example as follows:] On June 19th, 2017, Company ABC issued an inquiry. I could not have authorized the inquiry as I was undergoing surgery at the time. Please see attached documents for verification. Please investigate and remove these inquiries as quickly as possible. In the near future, I will be applying for a car loan and it is important that my credit score accurately reflects my credit standing. If you come across any evidence that counters my claim, please send me a copy. Thank you for your diligence in looking into this issue. Sincerely,
[Printed Name and Signature]
Every credit bureau that provided a report with errors needs to be sent a formal removal letter and supporting documentation. If different reports show different errors, make sure your letters properly reflect this.
TIP: Send one letter for ALL mistakes found in a specific credit report. You don't need a separate letter for each mistake. However, you WILL need to submit a letter to each bureau for the mistakes in their report. In other words, you may send up to three letters in total.
TIP: Your social security number is not required, but this extra bit of identification may help credit bureaus find your account information faster.
Be sure to send your letter and all supporting documents by certified mail. It's important to keep records of everything you send and when you send it so that you can follow up. Once you submit your letter, expect to hear back from the credit bureaus within the next few weeks. But it can take up to 60 days for changes to be made to your report.
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If I cosign a loan, will I have an inquiry on my report?
Yes. If you're cosigning a loan for someone else, then a hard credit inquiry will be issued. Your credit score will be affected. My false inquiry claim was disputed by a company. Now what?
If a company disputes your claim, then it is THEIR responsibility to provide evidence backing their claim. If they provide no evidence, then you have grounds to get the inquiry removed. When writing your letter to the credit bureaus, state that the company disputed your claim but was unable to provide any evidence. Is there a time limit for disputing a false inquiry?
Hard inquiries only impact your score for 1 year but stay on your report for 2 years. You can submit a removal claim anytime within that 2-year period. Since the whole process can take several weeks, the sooner the better.
Removing false inquiries and mistakes can be a time-consuming process. But staying diligent and reporting any inquiry errors will ensure you have the credit score you deserve. Follow our step-by-step guide to resolve the issue as quickly and painlessly as possible.
Evan Manwell is a content manager at CreditDonkey, a credit card comparison and reviews website. Write to Evan Manwell at evan@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
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