If you’re looking to improve your credit score, it’s important to understand how credit inquiries work. In this blog post, we’ll explain what credit inquiries are and how to remove them from your credit report.
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What is a credit inquiry?
A credit inquiry is a request by a lender to check your credit report. Inquiries can be made by organizations that you have applied for credit with, or by companies that have extended you an offer of credit. Credit inquiries stay on your report for up to two years, but they generally only affect your score for the first year. Inquiries are only 10% of your FICO® Score 8 calculation, so even if you have a lot of them, it won’t necessarily have a large impact on your scores.
How do credit inquiries affect your credit score?
In general, credit inquiries have a minor impact on your credit score. They become a factor when you are applying for new credit because lenders will review your credit report as part of their decision-making process. Too many inquiries in a short period of time can signal to lenders that you are in financial distress or that you are trying to obtain too much credit, which could negatively impact your credit score.
If you are shopping for a mortgage, auto loan or student loan, it’s best to do so within a short period of time (e.g., 30 days) so that all of the inquiries will be counted as just one inquiry when your credit score is calculated.
As a general rule, inquiries remain on your credit report for two years. However, they will only have an impact on your credit score for the first year. After that, they will fall off your report and will no longer be factored into your credit score.
If you find an inquiry on your credit report that you don’t recognize, it could be the result of identity theft. In this case, you should file a dispute with the credit bureau to have the inquiry removed from your report.
How long do credit inquiries stay on your credit report?
Most inquiries will stay on your credit report for two years. Inquiries have the potential to impact your credit scores. But, after 12 months, they will only affect your scores if they are from companies with which you have applied for new credit within the past six months.
How to remove credit inquiries from your credit report
If you have credit inquiries on your credit report, there are a few things you can do to remove them. You can send a dispute letter to the credit bureau, you can negotiate with the creditor, or you can wait for the inquiries to fall off your report. Let’s get into the details.
Request a goodwill adjustment
If you have a solid history of on-time payments and manage your account responsibly, you may be able to get some negative marks removed from your report simply by asking. This is called a goodwill adjustment, and it involves reaching out to the creditor and asking for leniency.
Here’s a sample goodwill letter you can use as a template:
Dear [Name of Creditor],
I am writing to inform you of an error on my credit report. According to my records, I have always made my payments on time and managed my account responsibly. However, there is an inquiry on my report that I did not authorize. I would appreciate if you could remove this inquiry as a goodwill gesture.
Thank you for your time and attention to this matter. If you have any questions or require any further information, please do not hesitate to contact me at [your contact information].
Send a cease and desist letter
You have the right to dispute any information on your credit report that is inaccurate, incomplete, or that you feel is unfair. If you send a dispute letter to the credit reporting agency, they are required by law to investigate and respond back to you within 30 days.
If the credit reporting agency finds that the information on your credit report is inaccurate, they will notify the creditor and ask them to verify the information. If the creditor cannot verify the information, it must be removed from your credit report.
If you have any delinquent accounts or collections on your credit report, you can send a “cease and desist” letter to the collection agency informing them that you no longer wish to be contacted about the debt. Once you send this letter, by law, they are not allowed to contact you again except to tell you that they will stop trying to collect or that they intend to take some other specific action.
Dispute the inquiry with the credit bureau
The first step is to send a dispute letter to the credit bureau that is reporting the inquiry. In the letter, you will need to include your name, address, social security number, and date of birth. You will also need to include a copy of your credit report with the inquiry in question highlighted. In the letter, you will need to state that you believe the inquiry is inaccurate and request that it be removed.
You can find sample dispute letters online. Be sure to keep a copy of the letter and any documentation that you send for your records.
The credit bureau has 30 days to investigate your dispute and will remove the inquiry if they find it to be inaccurate. If they find that the inquiry is accurate, they will not remove it from your report.
How to avoid credit inquiries in the future
Preventing credit inquiries is the best way to avoid having them impact your credit score. Here are a few things you can do:
-opt out of prescreened offers of credit and insurance by mail, email, telephone, or text message
-ask companies not to share your information with affiliates that might solicit you
-limit the number of companies that have access to your credit report