Credit inquiries can stay on your credit reports for up to two years and may hurt your credit scores. If there are unauthorized credit inquiries on your reports, you can try to remove them by disputing the inquiry with the creditor(s) that requested a copy of your credit report from the credit bureau. You can also send disputes directly to the credit bureaus.
A credit inquiry is a record of when a company or person requests a copy of your credit report. There are three major credit bureaus in the US—Equifax, Experian, and TransUnion—and each one adds inquiries to your report whenever they’re asked to create and share your credit report.
The bureaus also separate these inquiries into two categories, hard and soft inquiries. Sometimes, they’re called hard and soft credit pulls instead of inquiries.
A hard credit inquiry can appear on your credit report when a creditor requests your report as part of a lending decision. Often, creditors only request one of your credit reports, so it’s common to see a hard inquiry on a report from credit bureau A, even if it’s not on credit reports from bureaus B or C.
Hard inquiries can impact your credit scores, and they may appear when:
Fortunately, hard inquiries often have a minor impact on your scores, and sometimes a hard inquiry won’t impact your scores at all. Even so, because hard inquiries can impact your credit scores and may indicate a creditor is reviewing your information before opening an account, you may want to monitor your credit for new hard inquiries.
A soft inquiry is a record of someone checking your credit for a non-lending reason. Soft inquiries can happen when:
While you can wind up with many soft inquiries on your credit reports—some credit card companies may review your credit each month—soft inquiries never impact your credit scores. They also won’t appear on the copies of credit reports that most creditors receive, although you’ll see them when you check your own credit.
| Hard vs. Soft Credit Inquiries | ||
|---|---|---|
| Hard Inquiries | Soft Inquiries | |
| Impacts Your Credit Scores | Potentially | Never |
| Happens When | You apply for credit | Your credit is checked for a non-lending reason |
| Requires Your Permission | Yes | Sometimes |
| Stays On Your Credit Report For | Two years | Two years |
| Impacts Credit Scores For | Up to 12 months for FICO scores and 24 months for VantageScore scores | Doesn’t impact your scores |
When a hard inquiry hurts your credit, the exact impact will depend on your overall credit profile. Often, a single new hard inquiry may only drop your scores by around three to 10 points. And generally, scores rise back up to the pre-inquiry level within a few months if there’s no new negative information added to your credit report.
Multiple hard inquiries can lead to larger score drops as someone who’s applying for many new credit accounts might be at a greater risk of missing a payment in the future. However, credit scoring models also recognize that shopping and submitting multiple applications isn’t always risky behavior.
FICO and VantageScore (the two main credit scoring companies in the US), take slightly different approaches to rate shopping:
Knowing these rules, you can rate shop for a new loan without having to worry that it will have a major impact on your credit scores.
For example, an auto dealership may help you apply for auto loans from multiple lenders at once and then you’ll accept the best offer. While you could see a flurry of new hard inquiries on your credit reports, they won’t impact your scores more than one new auto loan hard inquiry.
As hard inquiries are the result of new applications for credit, you can control how many new hard inquiries get added to your credit reports by limiting how many applications you submit.
However, unauthorized hard inquiries can happen when a creditor checks your credit without your permission or someone uses your information to fraudulently apply for credit. One step you can take to prevent this is to freeze your three credit reports.
Once frozen, you’ll need to unfreeze your credit before the credit bureau will release your report to a new creditor. It’s a free process that can help prevent unauthorized credit inquiries and protect you from fraud.
Although the law requires companies and people to have a permissible purpose to check your credit, they don’t always need to get your prior authorization. Permissible unauthorized checks will lead to soft inquiries, so you don’t need to worry about them too much.
They could happen when a government agency or collection agency wants to review your credit. Or, when companies want to send you prescreened offers of credit. You can’t prevent all of these, but you can opt out of prescreened offers for five years at OptOutPrescreen.com.
It may be a good idea if you want to limit how much mail you receive. But remember that soft inquiries don’t impact your credit scores—and sometimes, a creditor may mail you a good offer.
You might find an inquiry on your credit report that you believe shouldn’t be there. Perhaps because it was the result of someone stealing your identity and applying for credit or a creditor checking your credit without a permissible purpose.
The federal Fair Credit Reporting Act gives you the right to dispute inaccurate information that’s on your credit report. There are several ways you can go about doing this:
You can send your dispute directly to a credit bureau and the bureau will usually have 30 days to investigate your dispute. The credit bureau will reach out to the creditor that initiated the credit check and attempt to verify that the creditor had the right to check your credit.
The credit bureau should send you a response with the result of its investigation. It may find that the inquiry was accurate and leave your credit report the same. Or, it may find an error and either correct or delete the inquiry.
Because each credit bureau maintains its own databases, you’ll have to send separate disputes to Equifax, Experian, and TransUnion. You can do this by mail, phone, or online.
You can also contact the creditor that initiated the credit check rather than (or in addition to) filing a dispute with the credit bureau.
When you don’t remember authorizing a credit check, you may want to ask the credit to verify that it had the right to request your credit report. A creditor should be able to produce a copy or recording of the application when you agreed to give it access to your credit. If not, you can request the creditor to tell the credit bureaus to remove the unauthorized hard inquiry.
You shouldn’t dispute a hard inquiry when you gave the creditor permission to check your credit as that’s a legitimate record of what happened. Also, if the inquiry led to you opening an account and you say you didn’t authorize the inquiry, the creditor may close your account assuming it was the result of fraud.
Sometimes, understanding which credit inquiries are legitimate can be difficult because the creditor’s name on your credit report might be different than the consumer-facing name that companies use on their websites or products.
Professional credit restoration specialists regularly review credit reports and can quickly spot when something may be amiss. After speaking with you about your specific situation, they can explain what should and shouldn’t be in your credit report and may be able to help you remove erroneous negative marks that could be hurting your credit scores—including things that have a larger impact than hard inquiries.
While recent hard inquiries can hurt your credit scores, they’re generally not the leading reason for having poor credit scores. Removing hard inquiries may increase your credit scores by a few points, but you want to focus on the bigger factors when you’re trying to build good credit.
At Credit Saint, we take a holistic approach to credit restoration. We can closely review your credit reports, help remove inaccurate negative information that may be hurting your scores, and guide you on the best ways to build your credit moving forward.