Removing Credit Inquiries that Affect Your Credit Score
Lots of people are confused by credit inquiries and how they affect credit scores. The good news is that many credit inquiries have absolutely no impact on your score. Before you get started on removing credit inquiries from your credit report, it is important to know which ones to remove.
In order to be considered a credit inquiry, the federal Fair Credit Reporting Act states that such an inquiry must be made by an entity having a “permissible purpose.” Although you may see inquiries from many such entities, even entities you’ve never heard of before, only those that are triggered by your own requests for new credit are used in the calculation of your credit score.
Such requests happen whenever you apply for a home loan, car loan, or for credit cards. Your signature on an application grants permission to the potential lender to inquire into your credit history. Since you initiated the request, the inquiry is considered voluntary and may affect your credit score. Although it’s true that you initiate a credit inquiry when you apply for a home or auto loan, inquiries from these industries are handled differently for credit score calculation purposes. See the section below on rate shopping for more information.
No other inquiries, whether made by you or by an entity with which you currently conduct business, matter. Businesses checking your credit to determine whether you should receive a credit card offer won’t affect your score because the offer is not something you requested. Likewise, it does not make sense to penalize you for being responsible and regularly inquiring as to the accuracy of the information contained on your credit report. These types of inquiries, when made within the past two years, will show up on your credit report. However they will not be used to calculate your credit score.
When you obtain a copy of your credit report you will notice a section for Inquiries. There you’ll find a listing of all inquiries that have been made over the past two years, the name of the entity that triggered the inquiry, and the date of the inquiry. Both voluntary and involuntary inquiries are included.