How to remove inquiries from your credit report

Let's face it, nobody likes being judged. But that's exactly what happens when lenders and creditors check your credit report. And if there are too many inquiries, it can feel like you're being judged by a firing squad. Some of those inquiries are absolutely necessary, but every once in a while, you may come across an inquiry that you don’t remember consenting to—and that might be bringing down your credit score. In this post, we'll show you how to remove those inquiries and get your credit report back to a fair trial.

Soft credit check vs Hard credit check

Credit inquiries can be confusing, so let’s break it down in an easy-to-understand way. Here's what you need to know: There are two types of credit inquiries, soft and hard.

Soft inquiries happen when you check your own credit score or when a company checks it for informational purposes. These inquiries don’t affect your credit score and are not visible to other lenders or creditors.

Hard inquiries, on the other hand, occur when a lender or creditor checks your credit report to make a lending decision. These inquiries can negatively impact your credit score and remain on your credit report for up to two years.

Examples of soft inquiries include checking your own credit score or getting a background check by a potential employer, while applying for a loan, a mortgage or a credit card are all examples of hard inquiries. An easy way to determine if it’s a soft or hard inquiry is to remember the rule of permissions. Did you consent to the credit check? If yes, it is probably a hard inquiry and if not, it’s a soft check which won’t affect your credit score.**

How does a soft credit inquiry impact your credit score

Sometimes financial institutions and creditors want to assess how well you manage your debt and credit history. This is where soft credit checks, also known as soft pulls, come into play. They allow creditors to review your credit report to understand how you handle credit and determine the level of risk you pose as a borrower.

As we mentioned before, soft inquiries commonly occur when you check your own credit report, but there are other examples too. For instance, a potential employer might check your credit, or the financial institutions you have existing relationships with may review your credit. Additionally, credit card companies may check your credit to send you pre-approved offers, and applying for a loan or mortgage pre-approval can also result in a soft inquiry.

Remember, checking your own credit score is a soft inquiry and won't hurt your credit. So, feel free to check your score as often as you like!

How to identify soft inquiries on your credit report

Soft inquiries are listed on your credit report under headings like "soft inquiries" or "inquiries that do not affect your credit rating." This section provides details about the companies that requested the soft inquiry, including their names and the date of the inquiry.

The great thing about soft inquiries is that they are not visible to potential lenders who review your credit reports. They are meant for your information and typically stay on your credit reports for 12 to 24 months, depending on the type of inquiry.

How can I remove soft inquiries from my credit report?

Since soft inquiries have no effect on your credit score, there's no need to remove them. In fact, you may not even see them on your credit report. So, you can rest assured that these inquiries won't harm your credit standing or don't require any action on your part.

How does a hard credit inquiry impact your credit score

As we discussed earlier, hard inquiries occur when a lender or creditor checks your credit report to make a lending decision, such as when you apply for a new credit card or a loan.

When a hard inquiry is made on your credit report, it can lower your credit score by a few points. The exact number of points varies depending on several factors, such as your current credit score, credit history, and the type of credit you're applying for. For example, if you have a limited credit history or a lower credit score, a hard inquiry could have a larger impact on your score than if you have a long credit history and a higher score.

However, for most people, the impact of a hard inquiry is usually small and temporary. According to credit reporting agencies like Equifax and Experian, a hard inquiry typically stays on your credit report for up to two years. But the negative impact on your score usually only lasts for a few months.

If you're shopping around for a home or auto loan and getting your credit pulled by multiple lenders, don't worry. Multiple hard inquiries within a short period of time are typically considered as one or two transactions and won't significantly impact your credit score or your ability to get new credit lines.

That being said, it's still a good idea to limit the number of hard inquiries on your credit report. A large number of back-to-back hard checks on your credit report can signal to lenders that you're a high-risk borrower and can impact your credit score, which can lead to higher interest rates or even rejection of credit applications.

How to identify hard inquiries on your credit report

Typically, hard credit checks can show up on your credit report under a section titled “Credit inquiries” or “Hard inquiries.” Sometimes, it may even show up as “Requests viewed by others” or “Regular inquiries.”

And when it comes to what a hard credit check shows on your credit report, it typically includes:

• Your personal information

• Credit accounts

• Payment history

• Debts in collections

• Information about who has inquired on your credit report

How to remove hard inquiries from your credit report

Applying for the removal of inquiries only works if they were a result of criminal activity or erroneous credit checking. In situations where a creditor pulled your credit without permission or a credit bureau mistakenly added an inquiry, the incorrect hard inquiry can still impact your credit until you take action. To address this, file a dispute with the credit bureau that shows the incorrect hard inquiry, requesting its removal.

Here are the steps you can take to dispute and remove incorrect hard credit checks on your credit report in Canada:

Step 1: Obtain a Copy of Your Credit Report

You are entitled to one free copy of your credit report per year from each of the two major credit reporting agencies in Canada, Equifax and TransUnion. You can request a copy of your credit report online or by mail. Once you have received your credit report, review it carefully to identify any incorrect or unauthorized hard credit checks.

Step 2: Contact the Creditor or Lender

If you identify an incorrect or unauthorized hard credit check on your credit report, the first step is to contact the creditor or lender who initiated the inquiry. Explain the situation and provide any evidence that supports your claim. Ask them to remove the inquiry from your credit report, and request a confirmation in writing.

Step 3: Dispute the Inquiry with the Credit Reporting Agency

If the creditor or lender refuses to remove the inquiry, or if you do not receive a response within a reasonable amount of time, you can dispute the inquiry with the credit reporting agency that issued your credit report. You can do this online or by mail, and you will need to provide documentation that supports your dispute. The credit reporting agency will investigate your dispute and notify you of the outcome.

When you're writing your dispute letter, remember to include the following important details:

• Your personal information: Start by providing your name, address, and date of birth. This helps the authorities identify you and ensure the accuracy of your request.

• Social Insurance Number (SIN): This is optional, but Including your SIN helps the credit bureau to further verify your identity and to locate your credit file accurately.

• Date of writing the letter: Clearly state the date when you're writing the dispute letter. This helps establish a timeline for your request.

• Details of the disputed information: Specify the dates of the disputed information and the company that provided that information. This ensures that the authorities can pinpoint the exact inquiry you are disputing.

• Request for inquiry removal: Clearly express your official request for the removal of the inquiry and provide valid reasons why you believe it should be removed. Be concise but persuasive in explaining your case.

• Supporting documents: Include any relevant supporting documents that can aid the authorities in their investigation. This could include bank statements, or evidence from the creditor. Remember to send copies of these documents, not the originals, as you will not get them back.

Check out this sample credit report dispute letter from the Consumer Financial Protection Bureau if you don’t know how to get started with your letter.

Step 4: Follow Up and Monitor Your Credit Report

After you have disputed the inquiry, follow up with the credit reporting agency to ensure that it has been removed from your credit report. It may take some time for the inquiry to be removed, so be patient and monitor your credit report regularly to ensure that it has been corrected.

Lastly, if none of these steps yield any fruit and if you suspect you’re being targeted by identity fraud due to the incorrect credit checks showing up on your credit report, immediately contact the authorities and consider the credit freeze option.

How can I prevent inquiries on my credit report?

While some hard inquiries are necessary, too many can lower your credit score. Wondering how to limit the number of hard pulls on your credit report and maintain a healthy credit score? Here are some best practices you can follow to minimize the chances of a hard inquiry on your credit report:

• Be selective when applying for credit: Every time you apply for credit, it results in a hard inquiry on your credit report. To prevent unnecessary inquiries, only apply for credit that you really need and that you’re confident you will be approved for.

• Research before applying for credit: Before you apply for any type of credit, research the lender or creditor and their credit requirements. Apply only if you’re sure of meeting their criteria to avoid being rejected, which can result in multiple inquiries.

• Utilize pre-qualification offers: Many lenders offer pre-qualification processes that allow you to check if you're likely to be approved for credit without impacting your credit score. You’re likely pre-qualified by the lender for that particular credit type because they did a soft check on your credit report—so taking advantage of that offer won’t affect your credit score.

• Be mindful of the rate shopping timeframe: When shopping for a mortgage or auto loan, you may want to compare rates from multiple lenders. However, each time you apply for credit, it results in a hard inquiry on your credit report. To prevent unnecessary inquiries, limit your rate shopping to a short period of time, such as 14 to 45 days.

• Regularly monitor your credit report: It’s crucial to regularly monitor your credit report as any unauthorized hard inquiries or transactions could be a sign of identity theft or an error. In such cases, time is of the essence—so the sooner you find out, the better.

In conclusion, if you identify an incorrect or unauthorized hard credit check on your credit report in Canada, you can dispute and remove it by following the steps mentioned in this article. On the flipside, if you see a soft check that you don’t recognize, there’s not much that you can do—or even need to do—as it doesn’t affect your credit standing. Lastly, make it a habit to review your credit report regularly—because if you don’t monitor it regularly, you won’t notice any incorrect hard checks that may have happened, and that will negatively affect your credit score in the long run.