Credit Report Inquiries
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The Inquiries section is the area that lists everyone that has asked to see your credit report. This is an area where expert opinion differs, just like personal information. Some experts believe that if there are inquiries that you did not consent to that you should try to have them removed. Others say that unless everything else on your report looks great don’t worry about this area. There are two types of inquires. One is a soft inquiry; the other is a hard inquiry
Soft inquires
Soft inquires are inquiries by companies that you did not request credit from. They are promotional inquiries, and inquiries by your current creditors to keep abreast of your financial situation, i.e., monitoring your account. Promotional inquiries can be prevented. You would need to write the credit bureau and tell them you want to ‘opt out’ of all promotions. If a company asks the credit bureau for a list of everyone in a certain score range so that they can send a pre-approved credit solicitation to them, the credit bureau will give them a copy of your report unless you ask them not to. This is an area of revenue for the credit bureau. They are in the business of selling the information they collect about you to others. If you don’t want that to happen you need to ‘opt out’ of promotions. You may also want to put a freeze on your report. It will not stop the bureau from giving out your information but it limits even more the people they can give it to. Only you see the list of companies that did a soft report.
Hard inquires
All hard inquires are listed on the report that everyone sees when viewing your credit report. A hard inquiry is from a company that you have initiated a credit application with. Applying for a line of credit at the bank or a car loan will initiate a hard inquiry.
Impact of inquiries
Companies offering you credit will evaluate this section to see if you have been applying for a lot of credit recently. Hard inquires will also impact your FICO score if you have too many in a 1 year period. There is a 30-day period for mortgage and car loans where all the hard inquiries are considered as one. Also if you have more than 1 in a 14-day period it will be counted as one. This is done so that you can shop for a car or mortgage loan without a negative impact on your credit score. Since this is not the main area that a FICO score is based on most people don’t worry about it. It can lower your score a little. It can impact you if you are on the cut off for better rates or credit approval. Again this is an area that the credit bureau says not to worry about. Since this may be a sign of identity theft you will want to review your inquiries and dispute any that you did not initiate.
Next Step: Understanding The Credit Repair OrganizationsAct
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