The number one question this month at http://www.credit-millionaire.com/ask is
“How do I remove inquiries from my credit report?”
To answer this question, I first want to come back to the language in the Fair Credit Reporting Act which states that if the “completeness” or “accuracy” of any item is information is disputed, it must be verified removed within 30 days of receiving the notice to dispute the item.
So if a inquiry is legally yours, it must be either incomplete or inaccurate for it to be challenged.
Ok, so first thing is first. There are soft inquiries and hard inquiries. Soft inquiries are when companies request the name and address of people that fit into a certain profile. These are listed at the end of your credit report, usually with a note that they don’t affect your score. They don’t. Lenders also don’t see these inquiries. They are listed for your information only, and they don’t hurt you.
While we are on the topic, neither do your own inquiries to your report. Don’t worry about them.
Then, when you look at your report there are likely some inquiries that you don’t recognize at all. Challenge them with an “I don’t recall” letter. Something like, “I don’t recall applying for credit from this company, please remove it from my credit report.” If that doesn’t work, send a 45 day letter, which can be found in the letters appendix of the Credit Millionaire System manual. If they aren’t legally yours, they shouldn’t be on the account.
So let’s talk whether they are legally yours. As credit millionaires, many of you are applying for credit for your business. Unless your business has been in existence for years, your lender is going to look at your personal credit to make a decision about your business credit.
This is the worst kind of inquiry, because the credit you are eventually extended doesn’t appear on your personal credit report. Inquiry without corresponding loan equals lower score.
Incidentally inquiry with corresponding loan usually means higher score… but that’s an explanation for another post.
So, how do you remove those business inquiries from the account? Step 1: send a letter to the bureau saying that those credit inquiries were for your business, and are therefore not yours and should be removed. This simple act seems to work 30% of the time. Step 2: if you don’t hear from them in 30 days, write a stronger letter that says they should be removed or verified by showing you a signed credit application in your name. As good credit millionaires, you wouldn’t have signed the application as you, but only as “Your Name, Title”, clearly showing that you personally didn’t apply for credit.
Next, inquiries that are your personal ones, but are inaccurate. Perhaps the creditor name is incorrect. Maybe you applied for credit from one company, but the inquiry is from another. Interestingly, the strategy is the same as it is above for business credit, except the “reason” is inaccuracy.
Finally, inquiries that are your personal ones that are incomplete. This is the least likely reason you’ll be able to challenge the account. Some reasons why the inquiry might be incomplete is because it lacks the full name or address of the creditor. Lame, but if it’s the truth, you may be able to get the inquiry removed.
With a challenge like this, you’re really hoping that they credit bureau doesn’t verify the item within 30 days. Items not verified in 30 days must be removed. To prove the 30 day time period, many people advocate sending certified letters. It’s up to you, but I usually don’t send the first letter certified. Certified letters are responded to more quickly at the bureau level.
You can also challenge an inquiry with the lender that’s listed on your report. You can write that “My credit report shows a credit inquiry by your company and I do not recall authorizing an inquiry. I know you aren’t legal allowed to put an inquiry on my report unless I have authorized it. Please have this removed from my credit file and forward me the documentation that you have done so.”
If you try this step and the lender doesn’t respond, you can use that fact in your credit bureau challenge. “Please note that before contacting you about this error I sent a letter to the lender responsible for this unauthorized inquiry and asked them to remove the inquiry from my report and cease this illegal activity. I have not heard a response from them within XX days.”
In all cases of inquiry disputes, it’s important to remember that the effect inquiries has on your credit report is very minimal. Only spend your time with them if they are the last thing you’re trying to challenge. Within 6 months the impact of the inquiry is quite minimal to your score (although particular lenders may care about the number), in just 2 years the inquiries are gone from your records.
One Response to “Remove Credit Inquiries the Credit Millionare Way”
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This is exactly what I been looking for Great post.