Credit Inquiry Removal Letter

Have you previously applied for a credit card or a loan? If so, you’ve likely been subject to a credit inquiry.

Whenever you apply for credit, the creditor will want specific information before approving the application. This information is gathered via a credit inquiry.

An inquiry can have a significant impact on your financial future. If you notice an inquiry you did not authorize, you need to get rid of it. Read ahead to know how you can go about it. 

A credit inquiry removal letter is an efficient way to improve your credit score. You must be aware of the fact that credit inquiries are the lowest significant scoring factor on the credit report and they account for five points for every inquiry. However, if you are not careful, they can add up very quickly. 

It is advisable to remove unauthorized credit inquiries and if you manage to have a few inquiries removed with a judgment or two, you will notice a difference in the interest rates and approvals. In order to build a strong credit score, you need to monitor it from time to time and ensure that it grows to become strong and healthy. 

If you are one of the many Americans struggling financially due to the coronavirus pandemic, you should not worry too much about your credit score. What you can do instead is take a break from stressing about the score and focus on identifying any errors in the credit report. 

If your credit score has too many credit inquiries, it is time to attempt to eliminate them. Here are some things you need to understand to start getting your credit score to where you want it to be. 

Hard and Soft Inquiries

There are two types of inquiries that show up on your credit report- soft inquiries and hard inquiries. A soft inquiry does not show up and all offers are counted as soft inquiries. The reason you may be receiving a lot of unsolicited credit card offers is soft inquiries. 

Most lenders read several credit reports to decide who to send offers to and it does not appear on the credit report since you had nothing to do with it. 

Surprisingly, companies don’t need your permission to make a soft inquiry. In fact, they’re quite common for landlords who screen tenants, credit cards companies determining pre-approved offers, and employers performing background checks.

Applications are considered hard inquiries and it is a result of an application for an auto loan, home mortgage, or credit. If you have applied for these, you will have an inquiry on the credit report. 

Whenever you make an application, the lender will run a check on the credit and it will appear on the report. You need to remember that EVERY hard inquiry will show up on the credit report. 

Hence, if you are looking around for a mortgage, the credit bureaus will be able to deduce that you are looking for a loan. Multiple inquiries in 45 days count as one hard inquiry. 

A hard inquiry will require direct permission and it can impact the credit for one year. It will also stay on the report for two years. Hard inquiries are commonly used when you apply for a mortgage, apply for a new credit card, or finance a car. 

Before Writing a Letter

There are four crucial steps you need to consider prior to putting pen to paper.

1. Check Your Credit Report

As against the common notion, checking your credit score or your credit report will not have an impact on the credit. There are few common ways to check the credit- you can either check your credit score or get a complete credit report.

However, only a comprehensive credit report will help you with the identification of unauthorized credit inquiries on the report. 

2. Check Your Score

There are different ways to check your credit score. Certain banks allow the customers to check their scores through their profile online. Alternatively, you can order a credit report. It will have complete details about the inquiries made by the creditors.

There are three important credit bureaus that collect reports- TransUnion, Experian, and Equifax. It is possible to ask for a report from every bureau individually. 

The Federal Law can get you a free copy of the report from every credit bureau once a year. It is best to look over the report once every year. You can get a report whenever you notice a significant change in your credit score. 

3. Understand the Impact of Inquiries on Your Credit

Out of the two types of inquiries, hard inquiries will have a minor impact on the score, which is often a drop between 1 to 5 points. The inquiries you did not authorize are called false hard inquiries and they can weaken your credit.

Your credit score is calculated from five different factors and they have an effect on the score. The higher your score, the higher your chances of getting a top loan for borrowers with good credit.

Your payment history has the highest impact of 35%, amount outstanding has 30%. Further, the length of credit history has an impact of 15% and types of credit utilized and new credit have an impact of 10%. 

An inquiry fits under the category of new credit, which means it will have an impact of 10% on the score. 

4. Check for Unauthorized Inquiries

Each inquiry on the report shows the company made an inquiry with the date on which it was made. You need to look for companies that you did not authorize, odd dates, and duplicates. If you notice any of these, it is a sign of an unauthorized inquiry. 

While reviewing your credit report, check for consistency between the three reports. However, you do need to remember that all inquiries are not sent to the three credit bureaus and a false inquiry could only appear in one of the bureaus. 

In order to eliminate these errors, you will have to make a formal request. Before you write a formal removal letter, you need to make copies of the reports that have false inquiries and mark the errors. 

As per law, when you ask the company for proof about the inquiry, the company will have 30 days to comply. In case the company cannot provide details or takes more than 30 days, you have the grounds for removal of the inquiry. Keep a record of communication with the company.

You need to make two things clear in your communication- the exact inquiries you are writing about and the dates on which they occurred and the information that you will act accordingly in case the company does not provide evidence in 30 days. After you know which inquiries on the report are incorrect, you can send them a removal letter. 

How to Write a Credit Inquiry Removal Letter

A credit inquiry removal letter is a request to have the inquiry removed from the records. All inquiries that you have authorized will remain on the record and unauthorized or false inquiries can be wiped off.

There is a certain format you need to follow in the letter and it needs to be typed and not handwritten. You can use the below-mentioned template. 

Submission of the Letter

You need to send a formal letter to every credit bureau and attach supporting documents. If the reports have different errors, you need to ensure that the letters reflect the same.

You can send one letter for all the mistakes found in the credit report. You will have to submit a letter to every bureau for the mistakes in the report. This means you can send up to three letters in total. 

What to Include in a Credit Inquiry Removal Letter

When you mail the letter, you need to include:

• Evidence that supports your claims,
• Copies of the credit report with errors properly highlighted, 
• Proof that you did reach out to the companies, and
• Identity proof

Send the letter and documents by mail and keep a record of all the documents you send. After submission of the letter, you will hear from the bureaus within the next few weeks but it could take up to 60 days for changes to be reflected in the report.

Credit Score and Coronavirus

Millions of Americans are suffering due to COVID-19. Many have lost their jobs and have a huge debt to pay. If you are worried about your credit score amidst the pandemic, you only need to focus on making timely payments. 

Identify high priority debt and try to clear it at the earliest. Your credit score will automatically improve when there are no inquiries and there is timely debt payment. If you have a reduction of income and are struggling financially, you should not stress about your credit score but should be mindful of it. 

Try not to make new applications and do not open new accounts for a credit mix. Think of a debt consolidation loan to help with the outstanding loans. 

Is It Possible to Remove an Inquiry?

You should look through your report from time to time to see if there is something in there to challenge. If you find any inaccuracy, you need to immediately contact the credit company and ask them to remove the inquiry. 

After you have taken the necessary steps and you still find that you need to have an inquiry removed from your credit report, you need to write a letter to the credit bureau reporting bad inquiries. 

How to Deal With Potential Identity Theft

You might come across a situation where someone else has authorized an inquiry in your name. This means you have been a victim of identity theft. You need to make a complaint to the Federal Trade Commission. Here is how you can go about it.

1. Make a Report at IdentityTheft.gov

At identitytheft.gov, you will have to answer some questions to explain what exactly happened. The process for every situation of identity theft is different and the questions are created for a personalized recovery plan. 

2. Stick to Their Recovery Plan

There will be different recovery plans but you will have to provide proof of identity, evidence that strengthens the claim and examples of when and where the theft occurred. 

You will have to submit a formal letter to the Federal Trade Commission and they will give complete details you need to include in the letter. Once you do that, you need to follow the progress and adhere to the requirements.

There will be a lot of paperwork involved between the government and you. Continue to track the progress through the site you filed the report and stay attentive. 

3.Take the Necessary Steps

There are additional steps you can take while you wait for your case to be processed. You can file an official police report, and put a freeze on your credit so as to prevent credit inquiries. A credit freeze can last from 90 days to 7 years and you can initiate it online. 

It can take up to one year for the case to be resolved.

Credit Inquiry Removal Letter FAQs

If I co-sign for a loan, will there be an inquiry on my report?

In case of cosigning a loan, there will be a hard inquiry and it will have an impact on your credit report. 

What if the company disputes a false inquiry claim?

When a company disputes the claim, it is the company’s responsibility to give evidence backing this claim. In case they do not give any evidence, you can get the inquiry removed.

If you happen to write to the credit bureaus, you need to mention that the company disputed the claim and has not provided any evidence for it. 

Is there a time limit for disputing an inquiry?

A hard inquiry will only impact your credit score for one year but it will stay on the report for two years. However, you can submit a claim for removal within the two years but the process can take a few weeks.

How long does an inquiry remain on the credit report?

A hard inquiry will remain on the credit report for 2 years. But they are factored in the FICO scoring model only for 1 year, hence, your score will not be impacted after 1 year. 

Does checking my credit count as an inquiry?

Don’t be afraid to check your credit. They are soft inquiries and do not impact your credit score. 

What is a 609 dispute letter?

Section 609 is a section of the Fair Credit Reporting Act and it speaks about your rights to get copies of your credit reports and information that appears on the credit reports. However, it does not have anything to do with your right to dispute information on the credit reports.

There is no 609 dispute letter in the Act. However, information about the right to dispute information you believe is incorrect is in section 611.

Will removing inquiries increase credit score?

Removing inquiries will not increase your credit score. The score will not change but there will be other benefits to consider. If the inquiries ended in denial, the creditors will not be able to see that anymore. 

Credit seeking behavior is considered to be high risk and an inquiry is a quick way for a creditor to identify whether you are credit hungry or not. The top credit monitoring services can inform you about any suspicious activity. There might be no change in the score but there will be an improvement in the content of the report. 

Do 609 letters work?

A 609 letter is about the responsibility of the credit bureau to report information that is verified. The idea behind a 609 letter is to ask your creditors to find information, which would make it difficult to verify the disputed item. 

As per your rights under FCRA, a 609 letter can help you remove unsubstantiated information in the credit report but if the furnisher can verify the accuracy of the information, it will be added back to your file. You remain obligated to repay the debts, even if the credit bureaus remove the information from your file.  

How can I stop hard credit inquiries?

You can dispute hard inquiries on the credit report. You need to work with the credit reporting agency and the creditor that made the inquiry. However, a hard inquiry which is authorized by you will have to fall off naturally, which happens after two years. 

Do I have to dispute all 3 credit bureaus?

You do not need to dispute all the three credit bureaus. You only need to dispute the credit bureau whose credit report shows the inaccuracy.

Can disputing hurt your credit?

Disputing will not have an impact on your credit score. But if the information on the credit report changes after your dispute is processed, there could be a change in your credit score. There is certain information on the credit report that has no impact on your credit score.

How many credit inquiries are not good on the report?

Multiple hard inquiries can deplete the score. People with four credit inquiries in a short period can lead to a lower score.

People with six or more recent inquiries are likely to file for bankruptcy as compared to those with none.

What happens when a hard inquiry is removed?

When a hard inquiry is removed from your credit report, your credit score will go up. When lenders see you applying for a lot of credit, they may deny new credit to you. Hence, when the hard inquiry falls off, the lenders will never know you had it. 

How long does declined credit stay on file?

The credit report will not say whether your loan applications were approved or denied but it will lead to hard inquiries. A hard inquiry will remain on the credit report for up to two years and it can have a minor negative effect on your credit score.

Are 2 hard inquiries bad?

A hard inquiry is not bad to have but it can have a minor impact on your credit score. A hard inquiry can lead to a dip in your credit score by 5-10 points. This drop is temporary. Multiple hard inquiries can have a significant impact on your credit score.

How many credit inquiries should you have?

There is no minimum or the maximum number of credit inquiries you can have. Every additional credit inquiry will take less than five points off your credit score. It can have a greater impact if you have a short credit history or have very few accounts. Large inquiries mean a higher risk. 

How can I clean up my credit myself?

You can repair your credit all by yourself. In order to do this, you need to first know how to read and understand your credit report and dispute any inaccuracies.

You can also consider using top credit repair software to help with improving your credit. Besides that, you need to pay your dues on time and do not ask for credit unless you need it. Make regular bill payments and close outstanding loan accounts.

Can a deleted item be added back on the credit report?

It is important to understand why the item was deleted in the first place. If it was too old, it cannot be put back on the credit report. If you disputed an inquiry and the credit bureau deleted it, they can put it back on the credit report with adequate evidence and reasoning behind doing the same. Reinsertion of an item is not contingent on a payment being made or not.

Should I dispute credit online or by mail?

Experts recommend that it is best to dispute credit by mail. It will allow you to attach additional evidence and you will have proof of the mail you sent the credit bureau.