How To Remove Hard Inquiries On A Credit Report: 3 Ways
There are several ways to remove inaccurate hard inquiries from your credit report but they all share one common factor: the inquiry must be illegitimate to have it removed. You can’t remove a legitimate credit inquiry. Instead, you must wait for the 12 months to pass until FICO no longer considers the inquiry in your credit score.
Here are three ways to request the deletion of illegitimate credit inquiries.
How To Get Hard Inquiries To Fall Off Your Credit Report
This is a common question, so we wanted to make sure to cover it here.
Keep in mind that you cant take hard credit inquiries off of your credit report if they were authorized by you.
Despite this, considering a hard inquiry drops off of your credit report after just 2 years and depending on how immediate your goals are allowing a hard inquiry to fall off your credit report may be the ideal option anyway.
However, theres one exception: if you notice a hard inquiry on your account that you did not authorize.
A Soft Credit Check Vs A Hard Credit Check
Although both soft and hard credit inquiries appear on your credit reports, a soft check doesnt impact your credit score and, aside from a few exceptions, you are the only one who sees them in your file. Soft credit inquiries are reserved for prequalified insurance quotes and credit card offers, employers performing a background check on prospective hires, or you checking your own credit.
Hard pulls, on the other hand, are visible to anyone with access to your credit reports. They are implemented when you apply for a personal loan, mortgage, auto loan, apartment renting, student loan, or credit cards.
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How Do Hard Inquiries Affect Shopping For Loans
When you’re shopping around for the best rates on a mortgage, auto loan or other large loan, you may apply with several lenders, which will cause a separate hard inquiry from each one to appear on your credit report. But that doesn’t mean your credit score will plummet, as most credit scoring models weigh multiple inquiries for mortgage or auto loans as one inquiry if they are made within a certain time period . In fact, the newest scoring models from FICO® and VantageScore® completely ignore multiple inquiries for mortgage and auto loans within a short period of time. So you can shop for that dream car or home without worrying about your credit scores.
However, multiple hard inquiries for other types of credit, such as credit cards or even personal loans, aren’t treated the same way, and may cause lenders to suspect you’re having financial difficulties. Applying for a credit card, an auto loan, a home equity loan and a personal loan within the span of a month, for instance, could be a signal you’re in need of money or are taking on too much new debt too fast, and pose a risk to lenders that you won’t be able to pay it all back.
If you’re making a major purchase, you shouldn’t necessarily let the fear of hard inquiries stop you from shopping around for the lowest interest rates. However, you should take steps to ensure that hard inquiries don’t negatively affect your credit.
How To Check For Hard Pulls On Your Credit File
Start by getting a copy of your credit report from annualcreditreport.com. Each year youre entitled to a free credit report from each of the three bureaus.
Once you have your report on the screen, find the section for credit inquiries. Its possible you may have forgotten about a loan application you or your spouse originated in the past few months.
Its also possible a credit card company or car dealership checked your credit using a business name you dont recognize at first.
Just Google the name of the lender to see if its connected to an inquiry you remember. Find a phone number and give the company a call to confirm you applied for a loan.
If you remember the credit check, it was probably a legitimate hard inquiry and youll just need to wait a couple years for it to go away.
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Examples Of Hard Credit Inquiries And Soft Credit Inquiries
The difference between a hard and soft inquiry generally boils down to whether you gave the lender permission to check your credit. If you did, it may be reported as a hard inquiry. If you didnt, it should be reported as a soft inquiry.
Lets look at some examples of when a hard inquiry or a soft inquiry might be placed on your credit reports. Note: The following lists are not exhaustive and should be treated as a general guide.
Why Credit Reports Matter
Potential creditors use your credit report to decide whether they want to lend to you and what APR theyll offer you. Avoiding unnecessary damage to your credit report is essential if you want to apply for new credit any time soon whether its a credit card, personal loan or anything in between.
Employers and landlords may also look at your credit report.
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How Long Does A Credit Check Take
Nowadays, most lending institutions have automatic systems to run credit checks for them. These systems can finish a check in less than five seconds. Of course, if you want to conduct a credit check on yourself, it will take a bit longer. First, youll need to request your report at annualcreditreport.com by entering your name, address, social security number, and date of birth in an online form. Once you take care of that, you should be able to access your report right away.
Third parties that are checking your credit without the help of an automatic system – e.g., landlords – may have to wait 2 to 10 days to get your reports.
Check Your Credit Reports For Free
The first step is to get your credit reports from each of the three credit bureausEquifax, Experian and TransUnion. Often, the same information is recorded on all three, but not always, and thats why its important to check all three.
You can typically pull your credit reports for free once per year on AnnualCreditReport.com. However, due to Covid-19, you can order free weekly credit reports until April 20, 2022.
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How Rate Shopping Affects Your Credit Score
The FICO score ignores all mortgage and auto inquiries made in the 30 days before scoring. If you find a loan within 30 days, the inquiries wont affect your score while youre rate shopping.
The credit-scoring model recognizes that many consumers shop around for the best interest rates before purchasing a car or home, and that their searching may cause multiple lenders to request their credit report. To compensate for this, multiple auto or mortgage inquiries in any 14-day period are counted as just one inquiry.
In the newest formula used to calculate FICO scores, that 14-day period has been expanded to any 45-day period, Watt said.
This means consumers can shop around for an auto loan for up to 45 days without affecting their scores.
If youre wondering how to get the most bang for your buck while rate shopping, a nonprofit credit counselor can help walk you through the process. The advice is free and can save you from committing a costly error while perusing over various rates.
To sum things up, soft inquiries have no effect on your credit score. They happen all the time without your knowledge, so dont worry about them. A single hard inquiry will go mostly unnoticed by the credit bureaus. Any damage done will mend itself in a couple months.
However, if you make too many hard inquiries in a short enough period of time, your credit score will plummet.
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It’s More Than Just The Effect On Your Credit Score
A hard credit inquiry is when a lender checks your credit before approving you for a loan, such as a mortgage or car loan, or a credit card youve applied for. A soft inquiry happens when you receive an offer from a lender, like a pre-approved credit card, or when you check your own credit.
But do you know why hard inquiries happen instead of soft inquiries? What about the differences between the two? How about whether an inquiry is going to be hard or soft before it happens or whether there are repercussions for either? Learn the similarities and differences between hard and soft credit checks and more.
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Whats A Hard Credit Inquiry
Also known as a hard check, a hard inquiry happens when a lender checks your credit report after you apply for credit.
âWhen you apply for credit, you authorize those lenders to ask or âinquireâ for a copy of your credit report from a credit bureau,â credit-scoring company FICO® explains.
Examples of Hard Credit Inquiries
FICO says that you could trigger a hard inquiry by:
- Applying for a credit card.
- Applying for a loan.
- Applying for a mortgage or to rent an apartment.
- Opening accounts like phone, cable or internet.
Requesting a credit limit increase may also trigger a hard inquiry, but that can depend on the lender’s policies and your specific circumstances.
How To Keep Your Credit Report Healthy
Although you cant avoid inquiries completely, you can reduce them by planning in advance which credit applications youll be making and when. Also, if youre going to be rate shopping for a home or auto loan, try to keep them within a short window so the multiple inquiries will only count as one. Lastly, make use of soft inquiries when possible.
Obtaining a copy of your credit report from a site like AnnualCreditReport.com can help you understand whats on your report right now and take action on any errors. Its wise to obtain a copy around six months before you apply for a loan to give you time to fix the problem.
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When Hard Inquiries Dont Affect Your Credit Score
Not all hard credit inquiries will impact your credit score. The one case where they will not impact your score is when youre rate shopping.
Like shopping for anything else, when shopping for a loan, you want to check multiple lenders and get the best loan terms. However, this will usually involve a hard credit inquiry from each lender. The rate shopping window helps alleviate some of the impacts on your credit score.
The FICO credit scoring model allows you to apply for the same types of loans within a 14 or 45-day period without taking massive hits to your credit score for multiple credit inquiries. Only the first credit inquiry impacts your credit score during this window and all other related credit inquiries are ignored for scoring purposes. Keep in mind that these ignored inquiries will still show on your credit report.
For example, if youre shopping for a mortgage and apply to 10 mortgage companies trying to find the best rate in a 14 or 45-day period, only the first inquiry will impact your FICO Score. The remaining nine inquiries will show on your credit report but wont factor into the scoring algorithm.
There is one issue, however. The number of days of the rate-shopping window depends on the FICO scoring model a lender uses. The newest FICO model has a 45-day window, but older models have a 14-day window. So, try to keep your rate shopping inside the 14-day window to be safe.
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Soft Inquiry Vs Hard Inquiry
There is another inquiry that can occur during a credit check that you should be aware of, and its called a hard inquiry or hard pull. This happens when you apply for credit by filling out a credit card application. Hard inquiries also occur when you apply for a mortgage, an auto loan, or any number of other activities that result in a credit decision for or against you.
Hard pulls can harm your credit score for a few months and may stay on your credit report for about two years. The reason why factor hard inquiries into your credit score is that they assume that if you are applying for additional credit, you might be at greater risk of not paying back your existing debts. However, soft inquiries dont impact your credit score because they are not a formal credit application, so credit bureaus dont include them in their credit score calculations.
Soft inquiries are inquiries that you either didnt request or were made solely for informational purposes, while hard inquiries are the result of the credit application process.
How Hard Inquiries Fit Into The Bigger Picture Of Your Credit
Before you lie awake at night worrying about hard inquiries hurting your credit score, bear in mind that they actually have the least impact on your score of any scoring factor.
The most important factor in calculating your score is your payment history. If you dont pay every single bill on time, every single month, expect your score to collapse.
Second to your payment history is your credit utilization: the percentage of available credit that you owe. Say your credit card has a $10,000 limit, and you keep a balance of $5,000. That 50% credit utilization ratio hurts your credit score credit bureaus like to see a ratio of no more than 30%. Ideally, you want to pay your credit cards off in full each month, and avoid the interest.
The third greatest factor impacting your credit score is the average age of your credit accounts. The older the better, to demonstrate a long, stable history of responsible credit use.
Fourth comes the mix of credit account types. The bureaus like to see multiple types of credit accounts among your credit history, which establishes that you can handle different types of credit without abusing any of them.
The smallest impact on your score comes from inquiries. So as you look to improve your credit score, focus first on making sure you pay all bills on time, and paying down any high balances.
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How Much Do Hard Inquiries Impact A Credit Score
Remember, a soft inquiry will not have any impact on your credit score. Make sure you check your credit record regularly to maintain your credit score.
A single hard inquiry should not have a big impact on your credit score. You can expect a reduction of five points or less. If you have good credit, your score should bounce back in a few months.
If you have an extensive credit history, a single credit application might not affect your credit score at all.
If you do not have a good credit history you may be more affected by hard inquiries. If a lot of hard inquiries for different types of credit happen in a short amount of time, your overall credit score may be slightly reduced for as long as a year. After two years, hard inquiries drop off your credit report entirely.
If you have a short credit history or few accounts, you may also be more affected by hard inquiries.
Dont worry too much about how long hard inquiries stay on your credit report. Credit applications are not a major factor in calculating your credit score. Hard inquiries are part of your credit reports new credit category, but they dont weigh heavily relative to the other factors.
Do Credit Inquiries Affect My Fico Score
FICO’s research shows that opening several credit accounts in a short period of time represents greater credit risk. When the information on your credit report indicates that you have been applying for multiple new credit lines in a short period of time , your FICO Scores can be lower as a result. Although FICO Scores only consider inquiries from the last 12 months, inquiries remain on your credit report for two years.
If you apply for several credit cards within a short period of time, multiple inquiries will appear on your report. Looking for new credit can equate with higher risk, but most are not affected by multiple inquiries from auto, mortgage or student loan lenders within a short period of time. Typically, these are treated as a single inquiry and will have little impact on your credit scores.
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What Is The Difference Between Hard And Soft Inquiries
There are two main ways that hard and soft inquiries differ: