When it comes to lenders assessing you as a prospective borrower, hard inquiries play a big role. They are one indicator of your creditworthiness. If you’re curious about hard inquiries, we’ve got you covered.
What Is A Hard Inquiry?
Hard inquiries occur when you apply for a home loan, credit card, or other finance. They involve the lender analysing one or more credit reports to see if you fulfil its credit score requirements. It’s also known as a hard credit check or a hard pull.
Soft inquiries, in contrast, might occur at your request or without your knowledge; for example, when you wish to examine your credit report or when lenders check your credit before sending you a pre-approval offer.
A common misconception is that checking your credit history will hurt your score, but this is not the case. Soft inquiries don’t affect your credit score. Hard inquiries do often lower your credit score by a few points. A high number of hard inquiries on your credit file can suggest to lenders that you are a higher risk.
At A Glance
- When you apply for a loan or a new credit card, your credit report will be subjected to a hard inquiry, which can drop your credit score by a few points.
- An authorised hard inquiry cannot be removed. However, it will come off your credit record automatically after two years and typically only affects your score for about one year.
- If you are shopping among lenders for the best rates, this can cause hard inquiries on your credit report to fall within a few weeks of each other. In this instance, they will be counted as only a single hard inquiry.
Can I Dispute A Hard Inquiry On My Credit Report?
Yes. You are allowed to remove hard inquiries from your credit report if they are based on inaccurate, incomplete, unverifiable, unauthorised, or fraudulent information.
Scenarios Where You Can Dispute
- If you discover that a credit investigation was conducted without your permission or knowledge.
- If a lender has declined or withdrawn from the loan without your consent.
- If a credit bureau added a request to your report by mistake.
- If you notice a new credit card or loan on your credit record that you don’t recognise.
- If you felt pressured into approving the credit pull.
- If the number of inquiries was more than you expected.
- If a fraudster obtains a loan using your Tax File Number and other identifying information.
Scenarios Where You Can’t Dispute
- If you voluntarily applied for a loan and the request appears on your credit report.
- If you discover a legal loan application on your credit record.
- If you solicited a home repair and gave your details to the vendor, who used them to authorise a credit check.
- If a mortgage broker forwarded your loan application to various lenders when you sought financing while shopping for a home loan.
- If you’ve looked for mortgage rates online, and the website sent your application to many lenders to discover the best rate for you.
How Do I Dispute An Unauthorised Hard Inquiry?
If you discover an unauthorised hard inquiry on your credit report, you can file a formal dispute and request that the hard inquiry be deleted. You file the dispute with the credit agency that has placed the inquiry on your report. The credit agency will be one of these:
The Process
- Contact a consumer credit agency by mail, phone, or by filling out an online form to file a dispute.
- Write a letter to the credit bureau mentioning why you are writing and why you are disputing a hard inquiry.
- Notify the creditor before sending the request that they remove the inquiry from your report if you plan to bring a dispute to court. This will provide you with proof that you have notified the credit issuer or lender of your request.
If you’re not sure how to go about it, you can take help from a credit repair agency to assist you with claims removal and other actions that can help your credit score.
Our expert mortgage brokers can help to put you in touch with a good credit repair service. Call us on 1300 889 743 or fill out this free online assessment form.
You can track your request’s status through the credit agency’s dispute centre once you’ve submitted it. In most cases, the dispute resolution process will be completed within 30 days. The inquiry will not be erased from your credit record if it is found to be valid. However, if the investigation reveals that the inquiry was made in error or as a consequence of identity theft, it will be removed.
How Do I Protect Myself From Fraudulent Hard Inquiries?
Inaccurate information on your credit report is uncommon, but it does happen. Check your credit report regularly to avoid fraudulent and other incorrect information going unnoticed. Review what’s listed and keep an eye out for anything unfamiliar.
It’s impossible to prevent all identity theft, but keeping track of your credit history will keep you in a better position to stop a bad situation from getting much worse. You should also consider placing a fraud alert on your credit record as soon as you think you are or may be a victim of identity theft. This will make it more difficult for criminals to start a new account in your name.
Putting your credit report under a credit freeze provides even more security. A freeze prevents companies from making any inquiries. While you’re looking for a loan or credit, you can unfreeze your credit report to allow a legitimate hard inquiry to go through.
A few tips
- The best way to keep track of your credit is to keep a low balance, pay on time and apply for a new loan only when you really need it.
- The higher your score, the less you have to worry about the negative consequences of one loan application.
- If you practise good credit habits, it won’t take long for your account to get back on track after an inquiry. So, if you lose a few points due to multiple requests, don’t panic.
Let Us Help You!
The higher your credit score, the less danger you present, and the more likely you will qualify for that new loan. If you’ve been considering a home loan, we can help you with steps that will improve your credit score before you apply.
We’ll also connect you with lenders that will accept your situation and credit history. Contact us today by filling out our free assessment form or calling 1300 889 743 to get a competitive home loan package.