When you’re aiming for a better credit score, the last thing you want is to have your credit score take a hit. Unfortunately, little errors and mishaps can lower your score. One common reason for this is the “unauthorized credit inquiry”.

Essentially what happens, is that some unknown party does a credit pull and reviews your profile for an application that you may be unaware of. As strange and devious as it may seem, unauthorized credit inquiries happen more than most realize.

Fortunately, you can prevent these mischievous little acts from affecting you.

Who’s Fault is it Anyway?

It’s one thing to accept a credit limit on an existing card or to ask for a loan. You know that a hard inquiry will follow. But what if you haven’t applied for any of the sort in months or years? How does a credit inquiry just appear on your profile?

There are a number of parties that can cause these problems including:

 

• Insurance companies who gave you a quote
• Retail stores that offered you a card or an account
• Communication companies offering service upgrades (T.V/Cable/Internet packages)
• Landlords who ran a credit check on a newly rented home
• Employers who may have run a credit check on you
• Promotional items you unknowingly opted into

The list goes on. However, the ones mentioned above tend to be the most common sources of problems. There are two issues that occur with these unknown credit pulls.

First, the other party doesn’t openly inform you that they will pull your credit. Because of this, you may see no harm in agreeing to upgrade or accept an offer, especially if it seems to have some obvious benefits.

Second, it’s easy to forget that you applied for these accounts in the first place. Many of these accounts won’t affect your finances in any major way, so you might hastily accept an offer, perhaps, while lined up at a store or talking over the phone.

The Resulting Issues of Unauthorized Credit Inquiries

There’s one major problem that comes with unauthorized credit pulls: a lower score. And as mentioned from the start, that’s the complete opposite of what you want if you’re looking to rebuild or maintain good credit.

There is a trickle-down effect of course. The points that a series of unauthorized hard inquiries take off are usually low (around five or so). Nevertheless, they take you further away from the numbers that will get you approved for the best loans. And if you’re on the edge of loan approval, just a small deduction in points can mean that you no longer qualify. Serious indeed!

Tips to Fight Unauthorized Credit Pulls and Avoid Them in the Future

So how do you keep the hands of unwanted lenders and companies away from your credit profile? You have to stay ahead of them to beat them at their own game.

To put it simply, everytime someone offers you an upgrade, store account or card, remind yourself that they could pull your credit without you knowing. That alone may help you decide whether you want to proceed or back off.

It isn’t always this simple, however, and that means you might have to take things a bit further.

 

• Check the Date the Inquiry Was Made – The first step is to look at the date of the inquiry. That will give you a starting point. You can then trace your steps and see if you accepted an offer or made a transaction where credit inquiries are normal.
• Identify the Company that Made the Inquiry & Contact Them – If the inquiry is foreign to you and seems fraudulent, then you should contact the company to ask them to prove that there was a legitimate reason for pulling your credit. Tell them also to notify one of the three credit bureaus, TransUnion, Equifax or Experian, so you that error can be removed.
• Report the Inquiry & Notify Bureaus – Contact one of the three credit bureaus to let them know about the inquiry. You can place a credit freeze so that no one else can access your credit reports in the time being. However, make sure to contact all three to freeze your report since one bureau will not freeze your report at another.
• Place Fraud Alert (if necessary) – You can take the freeze process an extra step by placing a 90-day fraud alert with any of the three bureaus. A fraud alert gives lenders a heads up that they’ll have to verify your identity before granting you any credit. That means they won’t be able to pre-approve you for anything without permission.
• Dispute Inquiry With Credit Bureau & Try to Get it Removed – The most crucial part of the process is to have the inquiry challenged and erased. Removing an inquiry can either go smoothly or prove challenging. The former is true if you can show proof of fraud or an unauthorized credit extension. The latter is true if the company claims you authorized or agreed to the credit application. When contacting the credit bureau, keep in mind that it’s better to phone them or mail them – in most cases, the bureaus do not accept online disputes.

 

 

Don’t Let Strangers Put a Dent On Your Credit

An unauthorized credit inquiry is frustrating to anyone, but even more so to the person who’s looking to improve their score. If it’s happened to you, don’t let it bring you too much stress. The number of points that they knock off is fairly small, and if you didn’t authorize the credit extension, you will likely have no issue proving that it’s fraudulent.

More importantly, leave no stone unturned. Be diligent in your search for errors and ask as many questions as possible to get the info you need. In doing so, you will build a much stronger case for yourself.