How to Remove Inquiries From Your Credit Report
Certain businesses check your credit report when you make an application for services with them. Credit card companies, lenders, utility companies, and insurance companies are just a few of the businesses that routinely check credit reports as part of their application process.
The credit bureaus keep a record of all the businesses that request your credit report. This record is listed in a section of your credit report called Inquiries. All the inquiries made to your credit report within the last 24 months are listed on your credit report.
Whenever you check your credit report, you're able to see inquiries from businesses that checked your credit after you initiated an application (hard inquiries) and from businesses that check your credit to prescreen you for products and services (soft inquiries). So it may look like you have a lot of inquiries. When other businesses check your credit, they only see the inquiries stemming from applications you've made, not the soft inquiries.
About Credit Report Inquiries
You may already know that inquiries are a factor in your credit score. Ten percent of your credit score is based on inquiries made into your credit. Fortunately, not all the inquiries you see on your credit report are factored into your credit score. First, only hard inquiries — those resulting from your applications for credit — are included in your credit score. Second, while inquiries appear on your credit report for two years, only those made within the past 12 months are included in your credit score.
Spacing out your credit applications can keep your credit score from suffering after multiple applications.
Inquiries — specifically hard inquiries — are one of the ways creditors and lenders decide whether to approve a new application. Since inquiries indicate whether you've been shopping for credit recently, potential creditors can attempt to predict whether you've recently taken on accounts that will make it harder to afford the credit card or loan you're applying for. Consumers who've shopped for credit within the past 12 months are generally riskier borrowers than those who have not. This is why the credit scoring calculation factors in inquiries made within the past year.
Note that if you've been shopping for a mortgage or auto loan, your credit report may contain several inquiries from companies you don't recognize. That's because many brokers and car salesmen "rate shop" on your behalf trying to find the lender who will give you the best rate. In that case, several different lenders will pull your credit report in a short period of time to qualify you for the loan.
The good news about rate shopping is that credit scoring models will treat the multiple inquiries as just a single inquiry as long as the rate shopping was done within a specific window of time, ranging from 14 to 45 days depending on the credit scoring model. More recent credit scoring models use a 45-day window. Unfortunately, consumers don't have control over the credit scoring models that lenders use. It's possible that your preferred lender will use a model that uses a 14-day window. For that reason, it's important to keep your rate shopping to as short a period of time as possible.
Steps to Remove Inquiries From Your Credit Report
It's important to check your credit report periodically to make sure there aren't any errors in your report. Errors can be costly to your credit score. In the case of inquiries, they could also reveal potential identity theft.
If you're in the market for a new credit card or loan or you're just seeking to clean up your credit, removing unauthorized inquiries is an important step. You want your credit report to be an accurate representation of your credit history.
Federal law gives you the right to dispute inaccurate information from your credit report. This includes hard inquiries you didn't authorize. To dispute an inquiry, write to the credit bureau letting them know the inquiry is an error and ask the credit bureau to remove the inquiry from your credit report. In your dispute letter, reference the name of the business that made the inquiry the date of the inquiry. Including this information will help the credit bureau identify the specific inquiry you're disputing.
Once the credit bureau receives your dispute, they're required to do an investigation with the company that listed the inquiry on your credit report. If the investigation shows the inquiry in indeed an error, the inquiry will be removed from your credit report.
Don't be surprised if you don't see a significant improvement in your credit score after having inquiries removed. Inquiries make up only a small part of your credit score. You'll see the best improvement in your credit by focusing on more significantly negative information like late payments or high credit card balances.
Inquiries Resulting From Fraud
Use the credit report dispute process to remove fraudulent inquiries from your credit report. Also review the rest of your credit report carefully for any unauthorized accounts. Consider placing a fraud alert or security freeze on your credit report to prevent future unauthorized inquiries and the opening of fraudulent accounts.
What About Inquiries You Actually Made?
Trying to remove an inquiry that resulted from an application you actually made is next to impossible. Credit bureaus have a right to report accurate information as long as it's complete and within the credit reporting time limit (two years for credit report inquiries). Therefore, you can't remove inquiries from your credit report because you changed your mind or you don't like having the inquiry there.
Fortunately, inquiries are not a big cause for concern. They're only on your credit report for a short period of time and only affect your credit for an even shorter period of time. An inquiry made this month will factor out of your credit score next year this time.
How Many Inquiries Are Too Many?
Unfortunately, it's impossible to know the exact number of inquiries that will hurt your credit score or your ability to get approved for a loan. The best way to keep your inquiries under control is to minimize the number of credit-based applications you make, especially within a 12-month timeframe.