An enquiry is when someone asks to gain access to your credit report. There are two main kind of inquiries that are made in to a credit report, hard inquires and soft inquiries. Out of these soft inquires have no impact on your credit score while the hard enquires, if made frequently within a short duration of time can impact your credit score negatively.
In order to learn where what inquiries are being made in to your credit report, order a copy of a recent credit report. You will receive the name, address and contact information of all sources that made an enquiry into your credit report.
What Are Hard Enquires?
A hard enquiry is recorded in your credit report when a business checks in to your credit report for the purpose of granting you a loan or credit. lets say you apply for a credit card. The credit card company will call for your credit report in order to check your credit worthiness. This is called a hard enquiry. If you apply for a home or an auto loan. The creditor will place a similar enquiry for your credit report to the credit bureau. if you are shopping for a line of credit and apply with several financing services, the result will be many hard enquires finding their way on your credit report. this is sometimes detrimental to your credit score as it may be perceived by some creditors that you are in trouble financially and are actively looking for further credit in order to keep your finances afloat.
It is for this reason that enquiries are recorded on the credit report in the first place. It is to give a new creditor an idea of how often and where all your have applied for credit. It is considered a bad sign if the credit report of a person shows random and frequent applications for credit. it brings the issue of a person getting in to a debt that is too large for them to repay. For example, someone who is already under a debt with the existing credit card may try to open other credit card accounts to continue using money that they do not have on credit.
However, in today’s world of competition, many creditors understand the fact that many consumers will check out the services with various creditors before taking up a large amount of loan such as home loan or an automobile loan. They will not consider this information on your credit report to be adverse information except in the case where you have already taken a similar loan already.
Some creditors that make enquires to periodically check on their existing customers are not counted as hard enquires and have no impact on the overall credit score.
What are Soft Enquires?
Soft enquires are when enquires are made in to your credit report by yourself or for the purpose of re-approved marketing offers. many businesses are looking out for potential customers for the credit services that they are offering. For this reason they may contact the credit bureau to look in to the credit reports of individuals that match a certain criteria. These enquiries do not impact your credit score adversely since they are not being made because of you looking for extra lines of credit.
Will The Enquiries Made By Myself Affect My Credit Score?
You yourself can make enquires in to your own credit report without it reflecting unfavorably. Many people do this for the purpose of monitoring the activity that is taking place on their credit report and to safeguard it from identity theft. In fact, the credit bureaus themselves offer credit monitoring services that allow you to check your credit report from all three credit bureaus as frequently as you like without it affecting your credit score at all. One such service is TrueCredit offered by TransUnion Credit Bureau. True credit is a service through which TransUnion offers credit monitoring, identity theft protection and a snapshot of all the 3 credit reports from Equifax, TransUnion and Experian in one place. They also offer the TransUnion score along with this 3 in one report and a personal analysis of the score.
How Long Do Enquires Stay Listed On A Credit Report?
Generally, an enquiry in to your credit report shows on a credit report for a period of 2 years from the day that it was made. a hard enquiry can typically impact your credit score for the 1st year. after that, due to the advent of time, it looses its relevance.
Who all Can Place Enquiries In to My Credit Report?
You must remember at all point of times that not everyone can make an enquiry in to you credit report as and when they please. Only businesses and government bodies that have a “permissible purpose’ can do so. The ‘permissible purpose’ has been defined a federal law that is known as the Fair Credit Reporting Act.
How can I limit who makes inquiries?
One way to limit the access to your credit report is to place a Security Freeze on it. this restricts the access to a large extent and is recommended only under certain conditions. In order to read more about what a security freeze is and how to place a security freeze on your credit report, click here.
There are other moderate ways of doing this as well, without blocking the access to businesses and offers that you may desire.
You may request that consumer reporting agencies do not distribute your name on lists used by creditors and insurers to make unsolicited offers of credit and insurance. Requests can be made by telephone or in writing by filling out a form available from each credit reporting agency.
Phone – Call (888) 5-OPT-OUT to notify all three credit bureaus (Experian, Equifax, and TransUnion) that you wish to opt-out of pre-screen offers. Telephone requests last for two years.
Online – Opt out of pre-approved offers of credit or insurance at www.optoutprescreen.com. The level of opt-out permanence can be chosen on the site.
Mail – Opt out of pre-approved offers of credit or insurance via written request using the following address:
TransUnion Name Removal Option
P.O. Box 505
Woodlyn, PA 19094
Written requests are permanent.