Your credit score plays a major role in your financial life.
Good credit makes it easier to qualify for loans and helps you secure lower interest rates on those loans. That makes borrowing money easier and much cheaper.
On the other hand, having poor credit can make it harder to find a willing lender and makes the loans you do qualify for more expensive.
Credit inquiries can reduce your credit score, which can be a big deal if you’re on the cusp of having good credit. But depending on your situation, you may be able to get some of those inquiries removed from your report.
What is a Credit Inquiry?
When you apply for a new credit card or loan, the lender usually wants to look at a copy of your credit report before it makes a lending decision.
There are three major credit bureaus: Experian, Equifax, and Transunion. The lender will reach out to one or more of these bureaus and ask for a copy of your credit report.
Your credit report includes a numerical credit score as well as information about your interactions with credit and debt. This includes your payment history, the amount of debt you have, and the different credit accounts you have open, such as credit cards, auto loans, personal loans, and your home mortgage.
Your credit report also includes information about your recent applications for credit.
When a lender asks a credit bureau for a copy of your report to use when making a lending decision, the credit bureau makes note of that request. That note is called a hard inquiry and appears on your credit report. Lenders can see hard inquiries on your credit report and each hard inquiry reduces your credit score by a few points.
If you apply for a lot of loans in a short period of time, you’ll have a lot of hard inquiries on your credit report, which can have a major impact on your score.
It’s important to note that credit bureaus only add hard inquiries to your report based on applications for loans or credit cards. Checking your own credit using one of the many services that let you do so does not count as a hard inquiry.
Similarly, letting a lender check to see whether you’re pre-qualified without submitting a full application does not create a hard inquiry on your credit report.
Instead, these are treated as soft inquiries, which do not impact your credit score. This means you can check your credit report for free once per year through each of the three credit bureaus. Or, you can ask lenders for pre-qualification without worrying about hurting your score.
Pro tip: If you’re looking for a way to improve your credit score, sign up for a free Experian Boost account. You’ll get credit for on-time payments from cable bills, internet, and streaming services. Read our Experian Boost review.
How Do Credit Inquiries Affect Your Credit?
Hard credit inquiries have a negative impact on your credit score.
When a hard inquiry appears on your report, it will reduce your credit score by a few points, usually no more than five to 10 points.
Other factors on your credit report can influence how much each inquiry reduces your score. If you have strong credit, an inquiry will likely have a smaller impact than if you already have poor credit.
Each hard inquiry affects your credit score. If one inquiry drops your score by 5 points, then having two might reduce it by 10, and having four on your report could drop it by about 20.
As time passes, the impact that each hard inquiry has on your credit score decreases. After a few months, you’ll likely regain most of the lost points, assuming the rest of your credit history remains positive.
Credit inquiries remain on your credit report for two years. Once two years pass from the day you submitted your application for a loan or credit card, the inquiry disappears from your report and it no longer affects your credit score.
How to Remove Credit Inquiries From Your Credit Report
If you’re applying for a loan, especially a large one like a mortgage, even a small difference in your credit score can be important in determining your interest rate or your chances to get approved for the loan.
If you have credit inquiries on your credit report, there are a few things you can do to remove them.
1. Wait It Out
The simplest strategy for removing credit inquiries from your credit report is to wait it out. Hard inquiries only stay on your report for two years and most of the impact they have on your score only lasts for a few months.
If you have the flexibility, you can wait a few months until recent inquiries stop having a big impact on your score or wait until they fall off your report completely before submitting an application for a new loan.
2. Dispute Fraudulent Inquiries
Credit bureaus are responsible for tracking people’s interactions with debt, but they don’t do so perfectly.
There are hundreds of millions of people in the United States, and keeping track of each of their credit histories is complicated. Many people could have errors in their credit reports that they don’t know about.
Before applying for a big loan, it’s a good idea to take a look at a copy of your credit report. There are a lot of services that give you the chance to check your credit.
By law, each credit bureau has to offer consumers one copy of their report each year for free. You can request a copy directly from the bureaus using AnnualCreditReport.com.
If you notice a credit inquiry on your report, but don’t remember applying for that loan, it may be an error or it may be evidence of identity theft or fraud.
Follow the credit bureau’s instructions for disputing an error on your credit report. Usually, you have to notify the credit bureau of the error and provide any relevant information or documentation to support your claim.
The credit bureau will investigate and either remove the error if it thinks you’re correct or leave the inquiry on your report if it thinks it is legitimate.
This is also a good opportunity to examine other parts of your credit report for errors. For example, if your credit report includes a missed payment even though you’ve never missed a payment, getting that error removed can give your score a major boost.
3. Add a Consumer Statement to Your Report
Sometimes when you dispute something on your credit report, such as a credit inquiry, the credit bureau may rule against you and keep the inquiry on your report.
If this happens, you aren’t completely out of luck. You have the opportunity to add a consumer statement to your credit report. Consumer statements are 100-word statements that cover individual pieces of information on your report or your credit report in general.
You can use a consumer statement to inform lenders that you disagree with the information contained in your credit report. You can also use consumer statements to provide an explanation for negatives like a late payment.
Adding a consumer statement to your credit report won’t impact your credit score at all but lenders will see the statement when they request a copy of your credit report.
You can add and remove consumer statements at any time. If you do add a consumer statement to your report, make sure you remember to remove it after the item you’re discussing falls off your credit report.
The last thing you want is a consumer statement justifying a missed payment when that missed payment no longer appears on your credit report. Instead of explaining a mistake that a lender already knows about it, it will inform potential lenders of negative information they wouldn’t otherwise have learned about.
Final Word
Your credit score is an important part of your financial life and credit inquiries can have an impact on that score. Credit inquiries play a small but not trivial role in your credit score tabulation.
But other financial behaviors — like how timely you’re making payments and how much money you borrow overall — are likely to have a much greater impact.
To maintain your credit, make sure you always make your monthly payments on time and only sign up for new credit cards and loans when you truly need them.
