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Credit Inquiries
Credit Inquiries

Credit Inquiries

All about inquiries

We all have them. Most of us aren’t sure where they came from or how long they are staying. No, we’re not talking about in-laws! We’re talking about inquiries on our credit profiles. Inquiries are one of the most confusing and least understood aspects of the credit reporting system. Here’s the skinny on inquiries and how you can manage them:

What are inquiries

An inquiry is a record of someone checking your credit information. Inquiries come in two distinct categories: “hard inquiries” that occur when a business views your credit profile for the purpose of an application and “soft inquiries” that occur when your credit is checked for other reasons. If you apply for a new credit card, a hard inquiry record will appear on your credit profile and may cause a drop in your credit score of about 5 points. When you check your own credit profile, or when it is checked for a pre-approved marketing purpose, it is considered a soft inquiry and will not harm your credit score.

Will checking my own credit harm my score?

Checking your own credit data online through a service like TransUnion will not harm your credit score. You can check your credit whenever you want or can sign up for a monitoring program to automatically review your data without worrying about causing any damage to your credit score.

Why are inquiries recorded?

Inquiries are recorded so that potential creditors and lenders can view how often you have applied for new credit. Potential creditors may think you are trying to spend beyond your means if there are too many inquiries on your credit report. You can still shop around for a loan; multiple inquiries for the same purpose in a short amount of time are commonly grouped into one less harmful inquiry session. Inquiries are also helpful for consumers because they can notify you of a potential identity thief applying for accounts in your name.

How long do they last?

Hard inquiries remain on your credit report for a minimum of 3 years from the original placement. You are allowed to dispute inquiries on your credit profile, but it can be difficult to prove that the inquiry is indeed inaccurate. If you are unsure of where an inquiry came from, try contacting the company listed before sending off a letter of dispute.

Who can place an inquiry?

Only people with legitimate business needs can access your credit information. This includes creditors, lenders, insurers and landlords who need to review your credit as a part of an application process. Each inquiry record will only appear on the credit profile that was checked for the application. For example, if a lender checks your TransUnion credit history to help determine your rates, this inquiry record will only appear on your TransUnion credit profile.

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