Shopping for credit online can have serious
hazards to your credit report. Every time you shop for a loan
it results in a credit
inquiry. Those individual inquiries can reduce your credit
score. Credit scores range from 300 to 900 with 900 being
best. Each time you apply for credit, your credit reports
will place an inquiry at the bottom of your reports. While
a few inquiries are fine, too many can result in lowering
your credit score and denial of credit.
Creditors or potential lenders look at
too many inquiries as "desperate" and base part
of their credit decision on those excessive inquiries.
In addition, the potential creditor has no idea that those
inquiries have not resulted in a recent loan which could disqualify
you from being approved. The good news however, is scoring
models have now been adjusted to count multiple inquiries
within a 14-day period as a single request.
Too many inquiries
seems to be the topic of the day with consumers. Many don't
realize the impact of too many inquiries and only begin to
understand the affects after being turned down for loans because
of it.
Protect
yourself and your credit score by following a few simple rules:
Reduce &
unauthorized: You should limit your inquiries and dispute
any that you do not recall or agree with. Disputing inquiries
to the credit bureaus is pointless. They are not responsible
for removing those and do not investigate them unless the
originating creditor instructs them to. Take your complaint
directly to the lender with a certified
letter.
You reviewed
your credit: This is where you have have requested a copy
of your credit report. This is a "soft" inquiry
and does not negatively affect your credit. It is not seen
by potential creditors. (Neutral)
Credit Bureau
Review: This again, has no impact on your credit and simply
means the bureau reviewed your file. (Neutral)
Creditor review:
This is simply a standard review that is done by existing
creditors. It also does not impact your credit. (Neutral)
Credit Request:
This can be negative if you have too many. Inquiries remain
in your profile for 2 years, so too many of this type can
be negative and result in denials. (Negative)
Collection agency
review: Very negative. If you have any inquiries from
a collection agency who has begun collecting on an expired
debt (expired under the
statute for reporting, which is 7 years) then that does
not qualify for a permissible purpose and should be removed.
Inquiries from a collection agency are very negative.
IRS: Very
negative. Inquiries from the IRS usually tell a potential
lender that you are either being audited or have a tax
lien pending.
Tenant Screening:
This type of inquiry is O.K. It simply shows you are moving
or did move and the landlord ran a credit check. (Neutral)
Dispute Process
To dispute inquiries you need to write to the creditor direct.
Simply send a certified or registered letter to the creditor
and ask for removal.
Here is a
sample of what to write:
Dear Creditor:
In a recent review
of my credit reports I discovered an inquiry from your company.
I do not recall authorizing you to review my credit. Accordingly,
I would like to be sent proof that I initiated or requested
for you to review my credit. Please respond at your earliest
convenience.
Based on the FCRA,
I must have authorized you to review my credit with written
permission. Please forward a copy of that written authorization.
If you are unable to provide me with proof or do not retain
records of such authorization, please promptly remove the
inquiry from my credit report (name which credit bureau) and
send me written confirmation of the removal.
