Too many inquiries or credit applications can hurt your credit score. You can challenge any inquiry with Smart Dispute that you do not recognize, or you believe may be questionable, but the circumstances under which they can be removed are specific. Here's a breakdown:
- Types of Inquiries:
- Hard Inquiries: These are inquiries made by lenders or credit card companies when you apply for credit. Hard inquiries can impact your credit score for up to 12 months and will stay on your report for 24 months.
- Soft Inquiries: These occur when you or a company checks your credit report as part of a background check, or when a lender wants to pre-approve you for a credit offer without you initiating anything. Soft inquiries do not affect your credit score and are only visible to you on your report.
- Legitimate Inquiries: If a hard inquiry was authorized by you (e.g., you applied for a credit card, a loan, or a rental), it's legitimate and cannot be removed until the standard 24-month period expires. However, its impact on your credit score will diminish after the first 12 months.
- Unauthorized or Fraudulent Inquiries: If you didn't authorize a hard inquiry, or if there's a hard inquiry from a lender you don't recognize, it might be a sign of fraud or an error. In such cases, we can absolutely dispute the inquiry.
- Multiple Inquiries for the Same Loan Type: If you're rate shopping for a mortgage, auto loan, or student loan, multiple inquiries for the same type of loan within a short time frame (typically 14-45 days, depending on the credit scoring model) are usually treated as a single inquiry for scoring purposes. This is to encourage consumers to shop for the best rates without severely impacting their credit.
- Request for Removal of Soft Inquiries: While soft inquiries don't impact your credit score, if you see one from a company you don't recognize, it might be worth contacting the credit bureau or the company to understand the reason for the inquiry.
Remember, while inquiries are a factor in your credit score, they're a relatively small component. Factors like your payment history and credit utilization rate play a more substantial role in determining your score. If you're looking to improve or maintain your credit health, focus on consistent, on-time payments and keeping your credit balances low in relation to your credit limits.