There are compelling reasons for not fussing with inquiries that report on your credit report. Here, I will attempt to make the case for inquiry removal from a credit report. Understand, this should only be attempted if you have a valid reason to ask for removal.
Making the Case for Inquiry Removal
The FCRA allows for any lender or bank to report credit inquiries. It is important to understand the difference between hard pulls (inquiries that can harm credit) and soft pulls (don’t factor into credit scoring). Hard pulls are the type of inquiry that generally happens when applying for credit. Soft pulls happen for account review purpose and for general credit checks. When pulling your credit from the actual credit reporting agencies, you will see both styles of inquiries. When pulling from Credit Karma or similar, you will only see the hard pulls.
Hard credit pulls impact your credit score for one year, and appear for two. Soft pulls do not impact the score at all, and appear for two years.
The Impact is Minimal, Why Attempt Removal?
The why is simple. The cleaner the file, the easier future approval will be and the cleaner the score. This is the number one case study for inquiry removal. FICO scoring algorithms will place consumers in various buckets, and those buckets change how a lender will approve. Someone with a 780 credit score but 11 hard inquiries will have a harder approval than someone with a 720 and 0 inquiries. Lenders often see inquiries as an potential indication of financial distress, even if that isn’t the case. As a practiced credit gardener, I will often obsess over my inquiries to the point of writing lettings for even soft pulls.
When to Make the Case?
I will use a real world example. Early this year, I was working with Discover Financial in regards to a property loan quote. It is possible to pull approval and rates via a soft pull, but you need to confirm with a full inquiry process. This is fairly standard. When speaking with the lender, I opted against using their service. On the phone, the client care representative offered to run my credit and I stated no, verbally. I was stunned to find this inquiry on my credit report. (To be fair, it hit my monitoring immediately so I knew what happened).
Discover was not quick to work with me on the removal, so I had to go back to my experience and knowledge to secure this removal by using the following steps. Steps one and two are very important, because you need to have the failures at that level to have success with the further steps.
Step by Step:
- I wrote a certified letter stating my request. I provided the name of the agent I spoke with, what happened, and cited the FCRA as their ability to not report this inquiry. They did not comply with removal.
- I sent the letter, their return letter and their response to all three credit reporting agencies and opened a direct dispute to remove these. All three failed to comply.
- At this stage, I filed a CFPB complaint, provided the credit report(s), all the correspondence, and sent follow-up CCed letters to all the above entities, and included my states Attorney General.
The inquiry was removed after about 90 days. This is an average time frame to expect this kind of activity to take.
