If you remove a hard inquiry from your credit report, will your credit score improve?
After falling victim to identity theft, Jason Mikula had to learn the hard way how to remove inquiries from his credit reports in order to restore his good name.
[*] After discovering two unauthorised hard inquiries on his credit report in 2021, the professional in financial technology fought a relentless battle against identity thieves throughout the entire year.
One thing became abundantly clear while Mikula was working with the authorities to rid himself of fraudulent accounts and rebuild his creditworthiness.
Identity thieves have a much easier time than they should opening new credit accounts in your name, which can have a devastating effect on your credit score. Those who have been victims of identity theft and are now dealing with the fallout of the crime face a long and arduous process of remediation.
Even though removing inquiries won't necessarily result in a rise in your credit score, allowing potentially fraudulent credit pulls or errors to remain unresolved on your report can be problematic.
What exactly does it mean when it says "hard inquiry" on your credit report?
When someone requests to review your credit report as part of the application process for credit, this constitutes a "hard inquiry," which is recorded in your credit file. Requests like these from an authorised lender can lower your FICO score by as much as five points. These types of checks are also known as hard pulls or hard credit checks. [*]
Hard inquiries remain on your credit report for two years, but the effects they have on your score are only visible for one year after that. Your credit report will have a section labelled "Hard Inquiries" where you can view the results of these checks.
What sets it apart from a soft inquiry into your credit history?
When you pull your own credit report or receive a pre-approved offer from a lender, these are both examples of soft inquiries that are made on your credit report. Your credit score will not be negatively impacted in any way by these kinds of inquiries.
It is in your best interest to refrain from making a large number of hard credit inquiries in a short period of time. This could be interpreted by potential creditors as a sign that you are making irresponsible credit applications or that you are unable to repay them when they are due.
When it comes to shopping around, here are some things you should know.
When you shop around for different types of credit accounts, such as the best credit card, personal finance options, or an auto loan, you may cause a flurry of hard checks to be performed on your credit report. Credit scoring models, on the other hand, can group together credit checks that are very similar to one another and give you the ability to shop around for the best interest rates.
This rate shopping window is different for each model, including but not limited to:
FICO: anywhere from 14 to 45 days, depending on the specific FICO scoring formula that was used.
VantageScore: 14-day span
There are three primary reasons why your credit report contains hard inquiry marks.
There are a few different angles to look at when conducting a thorough investigation. Because there is a possibility that not all inquiries are genuine, it is essential to maintain vigilance and report anything that appears to be incorrect.
checks drawn on an authorised lending institution
Data furnishers are any authorised lenders who report information to the credit reporting agencies. These lenders are also referred to as information reporters.
The companies that fall into this category include credit card companies, banks, loan companies, and even your landlord. When you apply for a new line of credit, the provider will want to conduct an investigation into your credit history before approving your application.
Therefore, you will be required to grant the lender permission to obtain a copy of your credit report in order for them to proceed with the loan process. For instance, in order to proceed with an application for a car loan, you will first need to have your credit checked.
Reporting errors
There may be instances in which one or more of the three major credit bureaus, namely Equifax, Experian, and TransUnion, include incorrect information in your file. Errors in reporting one's credit history frequently take the following forms:
Identity mismatches or files that are mixed up.
- Errors in your personally identifiable information (PII), such as a misspelt name, an outdated address, or a disconnected phone number
- Confusion regarding your account information because it was mistakenly associated with another person who shares your name or a name that is very similar to yours The same debt listed multiple times under different names
- Due to the perpetrator(s) of the identity theft, incorrect account information
Errors in the accounts
- Dates that are incorrect (e.g., opening date, last payment date, or date of first delinquency)
- Inaccurate reports of late payments or delinquencies
- Authorized users posed as the account owner in their reports.
- accounts that have been closed but are shown as open (or vice versa)
Balance and data management errors
- Inaccurate representation of the current balance or the credit limit
- Reintroduction of erroneous information even after it has been corrected
- Instances of the same account listed multiple times with various creditors
- Possible use of a stolen identity
If you come across an inquiry that is unfamiliar to you, it is possible that a lender made a genuine error. However, this may be an indication of fraud; therefore, you should always get in touch with the source of the data if you have any questions.
In the event that a fraudulent credit check is performed, the following are some immediate steps you can take to protect yourself from financial fraud:
Place a fraud alert or credit freeze:
- In order to place a fraud alert on your credit report, you will need to get in touch with either Experian, Equifax, or TransUnion. (That organisation will get in touch with the other two.)
- To put a freeze on your credit, you will need to contact each of the three credit bureaus individually.
- Give us two pieces of identification, such as a driver's licence, a passport, a birth certificate, or a Social Security card, and we'll be happy to let you in.
Please notify the Federal Trade Commission (FTC) about the theft of your identity:
- Go to the IdentityTheft.gov website.
- Create a police report detailing the suspected fraudulent activity along with the identity theft.
- In order to protect yourself, you should get a recovery plan and follow the guidelines provided by the FTC.
How Do You Dispute Unauthorized Inquiries, and How Do You Remove Them?
If you believe that there have been fraudulent hard pulls or reporting errors on your credit report, you should take steps to protect both your credit score and your identity. The following is a rundown of how the process of removing a credit inquiry works.
1. Get copies of your credit report that are free of charge.
You are permitted to make one request for a free credit report per bureau once per calendar year. There are many instances in which the three bureaus record the same information. But because there are inconsistencies from time to time, it is imperative that all three reports be thoroughly examined for indications of identity theft.
How to proceed:
- To protect yourself from identity theft, make it a routine to check your credit report once every few months.
- You can get a free copy of your credit report by going to AnnualCreditReport.com.
- Every year, you should place an order for your credit report from each of the three bureaus; your credit score is included in each bureau's version.
2. Immediately report any incorrectly hard inquiries.
The firm that conducted the in-depth credit check may be identified by a variety of names across the various credit reports it generated. Always double check anything that seems out of the ordinary to make sure it's not a scam.
How to proceed:
Check the section of your credit report that is labelled "Hard Inquiries."
Verify that you are treating all inquiries on your credit report as legitimate hard inquiries.
Take note of the information regarding any credit inquiries that are not recognised.
3. Make contact with the initial creditor.
By making direct contact with the furnisher, you may be able to circumvent the need for a formal dispute regarding a difficult inquiry (such as the credit card issuer or car dealership).
How to proceed:
Please get in touch with the creditor who initiated the hard inquiry. You should be able to find their contact information on the official website of their organisation or on the social media page of their organisation.
Explain that you think there is an error on your credit report, and ask that they remove the inquiry from your file as soon as possible.
Disclose all relevant information regarding the erroneous hard inquiry, such as the date on which the credit check was performed.
4. Raise the issue in a formal manner.
It's possible that your attempts to solve the problem on your own won't always be successful. You should submit a formal dispute if the entity that provided the information does not know how to remove inquiries from credit reports, or if the entity ignores or declines your request.
How to proceed:
Make a decision as to whether you will submit your dispute in written form or via the internet.
When you send a dispute letter through the mail, be sure to keep a copy for your own records. It is important to keep a record of everything in the event that you decide to take legal action at a later date.
Try to avoid resolving disputes over the phone whenever possible. It is difficult to keep a paper trail when using that method, despite the fact that it is a fast way to report problems and get advice from authorities.
5. Include all essential information
Be sure to include the following details in the letter that you are writing to dispute the transaction:
Information including one's name, address, and birthday
Identifier for social security purposes (SSN)
The date on which the letter was written.
Dates of information that is in dispute, as well as the name of the company that provided that information
The credit agency that is responsible for recording the contested hard inquiry
Your formal request for the investigation to be terminated, along with the reasons why you think the authorities should terminate the investigation.
Any pertinent supporting documents that will assist the authorities in their investigation, such as a report of identity theft filed with the FTC, bank statements, or evidence from the creditor
Please make sure to send copies of any supporting documents rather than the originals, as you will not be able to retrieve the originals. The Federal Trade Commission offers a sample dispute letter that you can use if you want to simplify this process.
6. Submit your dispute
It is imperative that you dispute any inquiries that leave you suspicious with the credit bureau that included them on your report. It was mentioned earlier that it is a good idea to keep track of the documentation in case there is a legal investigation. Therefore, the most effective strategy is to submit your credit dispute either online or in writing.
Errors on hard inquiries can be contested over the phone:
Equifax: 886-349-5191
Experian's phone number is 888-397-3742, and TransUnion's number is 800-916-8800.
Dispute errors in your hard inquiries online:
Equifax: online dispute page → Experian: online dispute portal →
TransUnion: online dispute page →
Send a letter notifying of the dispute via registered mail:
Equifax: Equifax Information Services, LLC, P.O. Box 740256, Atlanta, GA 30374
Experian: Experian, P.O. Box 4500, Allen, TX 75013
TransUnion Consumer Solutions can be reached at the following address: Post Office Box 2000, Chester, Pennsylvania 19016
7. Watch for the judge's decision.
Following the official lodging of your dispute, the credit reporting agencies are required to make a decision regarding the matter within 30 to 45 days. The bureau will get in touch with the provider to find out whether or not there was an error with the credit check.
In accordance with the Fair Credit Reporting Act, businesses that supply information to credit reporting agencies have a legal obligation to investigate any disputes that may arise.
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It is highly likely that the inquiry will be removed from your credit report if the bureau is unable to verify it. If the furnisher, on the other hand, claims that the hard inquiry is a legitimate credit check, the bureau may decide to dismiss the claim.
How to proceed:
You should write to the credit bureaus and ask them to add a notation to your credit file that explains the dispute in 100 words or less. This statement will be made available to any potential lenders in the future who conduct a hard inquiry on your credit report.
Make an appointment with a nonprofit credit counselling company for additional assistance. The National Foundation for Credit Counseling (NFCC) is an organisation that assists individuals in resolving credit issues and restoring their credit scores at no cost. Before approaching a credit repair company, you might want to think about speaking with a credit counsellor from the NFCC.
Not All Incorrect Inquiries Indicate Fraud. Aura Is Able To Assist
Even though not all unfamiliar credit checks are fraudulent, honest credit reporting mistakes can still damage your score, which can then result in you being denied credit cards, auto loans, or student loans.
You can get a free copy of your credit report by calling 1-877-322-8228 or ordering it online at AnnualCreditReport.com. Keep in mind that the free credit reports will not include your credit score; in order to obtain this information from any of the three bureaus, you may be required to pay a fee.
When you use an identity theft protection service that checks your credit report around the clock for indications of fraud, you can save a lot of time and avoid a lot of hassle.
With Aura, you'll get:
Rapid credit monitoring and fraud alerts — Get notifications whenever there is potentially fraudulent activity on any of your bank accounts, credit cards, or credit reports. You will be notified of any issues with Aura four times faster than with any other digital security provider.
Virtual Private Network (VPN) that protects against malware — Keep all of your devices safe from cybercriminals by browsing with Wi-Fi protection and encryption that meets military standards.
Your credit report can be locked instantly with our one-click credit lock feature, which also helps prevent unauthorised inquiries into your credit report.
Scan the dark web to check the exposure of your personal information and make sure that your Social Security number and credit card numbers are not at risk.
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