Having a series of hard inquiries hit your credit report can cause your credit score to sink.
While hard inquiries are a necessary part of the credit application process, there are times when their use is unfair or in error. Although hard inquiries reflect only a small part of your overall credit score, you could still suffer unfavorable terms on loans as a result.
Read on to learn more about what hard inquiries are and how to remove them to raise your credit score.
When is a Hard Inquiry Applied to My Credit Report?
A hard inquiry will be applied to your account whenever you apply for a line of credit or to get approval for a lease. A hard inquiry will also be performed whenever you ask a lender for a quote.
Here are some instances when a hard inquiry will be performed on your credit report:
- Applying for a new credit card
- Mortgage application
- Buying or leasing a new car
- Rent agreement
- Student loan application
- Mobile phone contract
- Application for a personal loan
- Signing up for insurance
How Many Points Does a Hard Inquiry Deduct From My Credit Score?
The impact of credit applications and hard inquiries affects only 10% of your credit score. In general, a single credit inquiry will take less than five points off of your credit score. This can be higher if you have a short credit history.
How Long do Hard Inquiries Affect My Credit Score?
Hard inquiries remain on your account for two years, but the effect a hard inquiry has on your credit score only lasts for one year.
When Can I Remove Hard Inquiries?
A hard inquiry can be removed from your credit report whenever it was applied without your express consent.
A hard inquiry is eligible for removal from your report if it:
- Was meant for someone else
- Was done without your knowledge
- Was done without your approval
- Was done multiple times for the same credit application
- You were pressured into the credit application
It should also be noted that in some cases when you are applying for a loan, multiple lenders will be accessing your report and creating hard inquiries. However, hard inquiries for the same type of loan inquiry (mortgage, auto, student loan etc.) within the same 45 day period will be treated as one hard inquiry.
This applies for you as well if you are shopping around for the best rates.
How to Dispute Hard Inquiries
Once you have verified that hard inquiries on your report were done without your consent, you will need to write a dispute letter.
You will need to send these letters to the three main credit bureaus (Equifax, Experian and TransUnion LLC) as well as to the lender who applied the hard inquiry. These letters should be sent using certified mail so that no one can claim your letter never arrived.
Read our comprehensive guide on writing and sending credit report dispute letters.
When you were looking over your credit report, maybe you found more issues other than hard inquiries. The credit reporting business has holes, and mistakes on credit reports (including being hit with negative items meant for someone else) are common.
An FTC report showed that 1 in 5 consumers they used in their sample set had an error on their credit report. These errors were significant enough that it would hurt their chances for better loans.
To ensure your credit report is as clean as it can be, hire a credit repair company to fix it. All consumers can dispute items on their own, but a credit repair company is the only way to do it fast. They will identify any negative mark that can be removed from your report, and use their expertise to boost your credit score ASAP.
To get a free copy of your credit report and a free consultation with a credit repair specialist, contact us today.