Removing credit inquiries is a practice that you might want to consider doing from time to time in order to prevent it from wreaking havoc on your credit score. There are many reasons why an inquiry may pop up on your credit report. This may include asking your credit card company for an increase in your credit limit, applying for a loan to buy a house or car, responding to a credit offer in your mail and others.
There are generally two types of inquiries - soft and hard pull inquiries. Soft pull inquiries occur in situations like; when an existing creditor pulls your credit to verify your financial situation; when you yourself pull out your own credit report or when a company buys your information from any of the three credit reporting agencies. Soft pulls are basically harmless and does not affect or impact your credit score in any way. Hard pull inquiries on the other hand, does. They occur when you apply for a new credit limit, a new credit card, or submit a loan application, which is why you need to consider removal.
Before we get on to the four methods you can use to remove credit inquiries though, let's take a closer look on why it affects your credit score first:
• Having too many credit inquiries in your report gives creditors the impression that you are hungry for credit and may be in financial trouble.
• They can lead creditors to believe that these inquiries are credit lines that have not yet appeared on your report.
• Too many recent inquiries can be an indication that your debt-to-income ratio may be much higher than what you've stated.
Any of the reasons given above can mean trouble especially if you are planning to use the money you loan for something very important.
Now, let's get down to the process of removing them:
Step 1: Find out which credit inquiries are causing you problems.
To do this, you will need to order all three of your credit reports. Once they arrive, check the reports and locate the inquiries usually located at the end. Identify which of the inquiries will be appearing to grantors. Some can be quite apparent while others can be a complete mystery so make sure to note them down.
Step 2: Determine the address of each credit inquirer.
You can do this by matching your Experian with your Trans Union and Equifax reports or by calling the credit bureau in order to get an address or a toll free number which you ca n use. Once you have all the addresses, then you're ready to begin step three.
Step 3: Challenge the inquiry.
This is done by sending letters challenging each and every inquiry that you have found to be problematic. Ask for proof of authorization and be sure to send each letter through Certified Mail Return Receipt - no signature required. This way you'll have a paper trail that you can show to prove the actions that you have taken.
Step 4: Check and recheck.
Some of the creditors will provide you documentation regarding the inquiry while others will not. For those that do, remember to check and recheck the documentation to verify that you indeed authorized the inquiry. If there is any ambiguity, you can write back and complain regarding any of the issues you find questionable. For those that don't provide you with the documentation, it's relatively easier as being unable to provide ample proof will mean that they have no choice but to t ake the inquiry down.
Removing credit inquiries can be a bit ha ssling and might indeed take some of your time. Nonetheless, it is something that you really should take into consideration as they can cause you various unexpected problems later on.
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