Credit Disputes 101: Removing Inquiries
So, your loan application has been denied. The credit clerk informs you that a) your credit profile does not meet underwriting guidelines (your score dropped below credit score minimums), but b) you can receive a copy of your credit report should you wish to dispute the veracity of the inquiries with the credit bureaus. In essence, your bottomed-out credit score was caused by an inordinate amount of credit inquiries (22 to be exact) on your credit report.
You are speechless because you have not given out 22 authorizations willy-nilly. You do recall stopping at a car dealership last month. Could that one stop be the reason for a considerable credit score drop?
You have a sudden urge to learn how to remove authorized inquiries from credit reports to improve your credit score. For additional ways to improve your credit score, check out this article regarding authorized user accounts.
Getting to Know the Inquiry
An inquiry is the written, documented record that details who has reviewed your credit report. Inquiries remain on your credit report for two years, unless the inquiry is disputed and removed. .
A credit profile holds two different types of inquiries; you can learn how to remove authorized inquiries from credit report for either.
When you request to view your own credit report, these requests are not visible to anyone else, and they do NOT affect your credit score. They are known as soft inquiries or soft pulls. Other types of soft inquiries include an employer credit check or credit reviews done by existing creditors.
A Hard Inquiry is a credit request, which you initiate, like submitting an application for approval. The name ‘Hard Inquiry’ is derived from the ‘hard data’ used by a creditor. Hard Inquiries can and do negatively impact credit scores and lending decisions so it is smart to learn how to remove authorized inquiries from credit report.
A hard inquiry is a red flag. When a hard inquiry pops up on your credit report, the creditor presumes that these inquiries will likely lead to an increase in your debt. Ultimately, a lender’s concern rockets through the roof, as this is indicative of overspending and late payments. Every application you submit to a bank results in a request to view your credit. Hard pulls, as they are sometimes called, are really only impactful when your credit report shows an excessive amount. This is the primary reason you should know how to remove authorized inquiries from credit reports.
Generally, a hard inquiry reduces a score by 5 points, but it is still the smallest scoring influence. Three hard inquiries, or more, indicate the credit applicant may be in financial trouble.
The Right to Dispute
You have a have a legal right to dispute any kind of inquiry. When disputed, a credit bureau or creditor either verifies your authorization or they remove the inquiry. Creditors have certain time frames to follow; when they fail, your disputed inquiry is deleted by their inability to meet a preset deadline.
The Fair Credit Reporting Act (FCRA) is the federal law that oversees the manner in which a credit-reporting agency (CRA) manages the integrity of your credit data. The primary purposes of the act are designed to protect the confidentiality and veracity of your credit information. The contents of act is available here: PART 602—FAIR AND ACCURATE CREDIT TRANSACTIONS ACT OF 2003.
If you can’t remember requesting credit from a company that appears as an inquiry on your report, send a letter of dispute because the burden of proof is on the creditor or the bureaus. Creditors are obligated to prove your authorization or they must remove the inquiry in question.
There are times when a company WITHOUT your authorization makes a hard inquiry. When this occurs, you must proactively dispute the validity of the hard inquiry. The first step begins by sending a letter entitled “A Credit Inquiry Dispute Letter.” If possible, include a copy of the credit report page referencing the inquiry.
Alternate Ways to Remove Inquiries
A dispute can be directed at the creditor (i.e. not the credit bureau). Find the company’s address and send them a dispute letter asking them to remove the erroneous inquiry. It is best to send this dispute letter by certified mail as you have proof of delivery. If no action is taken, you can advise them that this matter will be referred to the State Banking Department. Here are a few insider tips to help learn how to remove authorized inquiries from credit reports:
Credit Disputes Tip #1:
The best time to dispute a hard inquiry is the time between the 3rd week in November through the 2nd week in January. For obvious reasons, the bureaus and lenders are understaffed due to the holidays, and often fall behind the eightball on deadlines.
Credit Disputes Tip #2:
It is imperative to remember that each credit bureau is an independent company so you need to contact each one independently.
Credit Disputes Tip #3:
Make sure to only dispute inquiries from creditors you have no relationship with; dispute the inquiry as fraud. Inaccurate inquiries with creditors you do have a relationships with shouldn’t be disputed directly with the credit bureaus. Contact the creditor directly and tell them the inquiry is reporting incorrectly and needs to be removed (or updated). If that doesn’t work, you can attempt to dispute the inquiry with credit bureaus.
Credit Disputes Tip #4: Deleting Experian Hard Inquiries
When you have a copy of your Experian report, find the inquiry section. Look through the inquiries to determine if any are duplicate or any 2 years old, or older. Call Experian to report your discovery and insist they remove the duplicate inquiries and those older than 2 years.
Credit Disputes Tip #5: Deleting Experian and Transunion Hard Inquiries
There is a credit dispute strategy, a stealth process known as bumpage, or B*. B* suggests that you request your own credit report often, in fact, very often. The idea, which is completely legit, is to amass as many soft inquiries as you can, which pushes the older inquiries to slowly drop from the report. This occurs because the credit bureaus do not have unlimited space for saving inquiries. There is a set amount of storage, and when full, the credit system drops the oldest inquiry.
Credit scores (and therefore credit inquiries) affect lending decisions. As such, you are advised to contact an expert to help guide you through the credit scoring and reporting matrix. If you are in need of an unsecured business line of credit or wish to find the easiest business credit card to get approved, don’t go it alone. LenCred financing experts are available to guide you to a business financing solution that meets your needs, and credit score.