Credit Inquiries: What is a Credit Inquiry?
Credit inquiries are one of the most confusing and least understood aspects of the credit reporting system
. Here are some frequently asked questions about credit inquiries:
What are inquiries?
Credit inquiries are records created when someone looks at your credit information. Credit inquiries are either "hard inquiries," as when a business views your credit report
in connection with an application for credit, or "soft inquiries" when your credit is checked for most other reasons. When you submit a credit card application, a hard credit inquiry appears on your credit report and may have an effect on your credit. When you monitor your own credit report
, or when someone checks it to make you a pre-approved credit offer, that creates a soft inquiry that is not seen by others, and will not have any impact on your credit score.
If I check my own credit, does that lower my score?
If you check your own credit data online through TransUnion or other monitoring programs
, it has no effect on your score. You can check your credit frequently or participate in a monitoring program that regularly reviews your data without lowering your score.
Why are credit inquiries recorded?
Credit inquiries are recorded so that you can know who has obtained your credit report. They also enable potential creditors and lenders to see when you have applied for credit. Too many credit inquiries may cause potential creditors to question whether you are seeking to obtain more credit than you can afford to repay. Credit inquiries can also help consumers by alerting them to identity thieves
using their information.
How long do credit inquiries remain on a report?
Most credit inquiries are required to remain for at least one year, and up to two years.
Who makes credit inquiries?
The Fair Credit Reporting Act stipulates that credit reports may be requested only for the specific purposes listed in the law. Companies who are typically permitted to access your credit information include creditors, lenders, insurers and landlords. Records of credit inquiries only appear on the credit bureau file from which your credit report was obtained. So if a lender checks only your TransUnion credit history to calculate your rates, this inquiry record only appears on your TransUnion Credit Report.
How can I limit who makes credit inquiries?
You can ask the credit reporting companies
not to distribute your name to creditors and insurers for unsolicited offers of credit and insurance. You can call or fill out a form available from each credit reporting company.
Now that you know more about credit inquiries, get your FREE credit score.