Credit Repair to Remove Inquiries

Hard inquiries are an important part of your credit score. In fact, they are one of the five main factors that can affect your score (when looking at the FICO scoring model). It is important that you have a clear understanding of what your credit score is and how these inquiries can have an impact. This knowledge can help you make sure that your credit score is as healthy as it can be!

What is Your Credit Score?

Your credit score is an important part of life. This score is a number that typically ranges from 300 to 850. It is used by lenders as a way to better understand your creditworthiness. The creditworthiness of a consumer is just how they handle borrowing money essentially.

Your credit score is calculated by credit bureaus using information found on your credit report. There are three main bureaus which are Experian, Equifax, and Transunion. These bureaus use scoring models in order to determine how each item on your credit report will impact your credit score.

There are two main scoring models. There is the VantageScore model and the FICO scoring model. However, the FICO scoring model is much more popular since it is used by 90% of top lenders.

What Factors Affect Your Credit Score?

Like we said earlier, there are five main factors that impact your score. These factors include:

  • Payment History
  • Credit Utilization Ratio
  • Credit Age
  • Hard Inquiries
  • Variety of Credit

Payment History

This is the most important factor of your credit score since it accounts for 35% of it. Your payment history will detail information like the payments you make, collection accounts, etc. This can give lenders a better idea of how you handle repaying your debts.

Credit Utilization Ratio

Your credit utilization ratio is another way to talk about your credit usage. This ratio looks at the amount of credit you’re using compared to your total credit limit. For example, if you have a total credit limit of $10,000 but are currently using $4,000 then your credit utilization ratio would be 40%. This is the second most impactful factor of your credit score since it accounts for 30% of it.

Credit Age

The age of your credit plays an important role in your credit score. This factor accounts for 15% of your score. The age of your oldest account, the average age of your accounts, the age of your newest account, etc., are all factors that will be included in the age of your credit. This can show lenders how you handle credit both in the long term and short term.

Hard Inquiries

Hard inquiries account for 10% of your credit score (just like your variety of credit). There are two types of inquiries. There are hard inquiries and soft inquiries. Hard inquiries are the ones that can affect your credit. Having these on your credit report can lower your score by up to 5 points.

Variety of Credit

Last but not least, your variety of credit will account for 10% of your credit score. There are two types of credit accounts:

  • Revolving Credit
  • Installment Loans

Having a more diverse mix of accounts can show lenders that you can handle different types of credit.

Where Does Your Score Fall?

Many people don’t realize that the scoring model heavily impacts the number of your credit score. The scoring model determines how each item on your credit report can have an impact on your credit score as well as how that credit score is ranked. When you look at the FICO scoring model:

  • Poor (credit scores between 300-579)
  • Fair (credit scores between 580-669)
  • Good (credit scores between 670-739)
  • Very Good (credit scores between 740-799)
  • Exceptional (credit scores between 800-850)

However, the VantageScore model is different. It has different categorizations of credit scores. When you look at the VantageScore model:

  • Very Poor (credit scores between 300-499)
  • Poor (credit scores between 500-600)
  • Fair (credit scores between 601-660)
  • Good (credit scores between 661-780)
  • Excellent (credit scores between 781-850)

What are Different Ways to Handle Credit Repair?

People can check their credit score for free in a number of different ways. They can:

  • Use third-party apps like Credit Karma
  • Check with their financial institution like Discover
  • Review their score after getting a free copy of their credit report

Regardless of how you check your score, you may realize that there is some room to work on improving it. People can handle the credit repair process by:

  • Getting Into Better Credit Habits
  • Hiring a Credit Repair Company

Getting Into Better Credit Habits

It’s important to keep in mind that your credit habits are an important part of your credit health. For example, if you consistently make late payments, then your credit score will show those negative marks. However, that is why it is important to start getting into better credit habits. While improving your habits won’t be able to change the mistakes you made in the past, it can help you avoid making the same mistake again. Some ways that people work on their credit include:

  • Pay bills on-time and in-full when they are due
  • Keep your credit utilization ratio below 30%
  • Only apply for new lines of credit that you need
  • Try to avoid submitting too many inquiries at once

Hiring a Credit Repair Company

Another way that people choose to handle credit repair is with a credit repair company. These companies (also known as credit repair agencies) will get a copy of your credit report, review it for any inaccurate items, and then submit disputes to the credit bureaus on your behalf. Thanks to the Fair Credit Reporting Act (FCRA), credit bureaus are required to report accurate information on consumer credit reports. If the item in question is found to be inaccurate, the bureaus will remove it from your credit report. This means any negative impact will be gone from both your credit report and your credit score!

Understanding Inquiries and Your Credit

There are a lot of common misconceptions when it comes to hard inquiries. That is why it is important that you understand what they are, how they impact your credit, and what you can do about them. When you apply for a new line of credit, you will need to provide written permission for a lender to get a look at your credit file. This permission is what a hard inquiry is. Also known as a hard pull, it provides lenders the chance to get an in-depth look at your credit file in order to better understand how much risk comes along with you as a borrower. These inquiries have a negative impact on your score so it is important to be mindful when submitting applications. Having too many of these inquiries at once in a short amount of time can give off the look that you are in need of money fast and don’t have the means to pay it back.

How to Get Hard Inquiries Removed From Your Credit Report Fast?

These inquiries will stay on your credit report for 2 years. They can impact your score by up to 5 points. However, the effect that these items have on your score will decrease over time until they eventually fall off at that two year mark.

Some people look to credit repair as a way to get rid of these inquiries. Using a credit repair agency can be extremely helpful when it comes to getting rid of these inquiries on your report. However, they can only help if the hard inquiry is inaccurate or unverifiable. Generally, the dispute process from start to finish can be completed within a few months.

Commonly Asked Questions

Learning about hard inquiries and your credit score can be a little bit confusing at first. Plenty of people have had questions that you may have too.

What are the Three Main Credit Bureaus?

As we said earlier, the three main bureaus are Experian, Equifax, and Transunion.

Can You Use Credit Repair to Remove Inquiries?

Soft inquiries will not show up on your credit report. However, hard inquiries will. If the hard inquiry is inaccurate or unverifiable then you can use the dispute process to get those items removed from your report.

What is the Fair Credit Reporting Act (FCRA)?

The FCRA can help consumers in a variety of different ways! This federal law was created as a way to help improve the level of accuracy and privacy of the information found in consumer’s credit files. Some of the ways that this act can help consumers includes:

  • It gives consumers the right to know if information in their credit file is the reason they are denied their application like a credit application, employment application, etc.
  • Consumers can get a free copy of their report every 12 months
  • Consumers can put a security freeze on their report in case of emergency

What are Credit Inquiries?

Credit inquiries are another term that’s used to describe hard inquiries. When searching online for information about inquiries and your credit, you may come across this term.

Overall

There are plenty of factors that can affect your credit. One of them is hard inquiries. If you think these inquiries are negatively impacting your credit, there are a couple things you can do. You can either wait for the negative impact to wear off until the item eventually falls off your credit report within 2 years, or you can get help from a credit repair agency if the hard inquiry is inaccurate. Credit repair companies can help you dispute an inaccurate or unverifiable item from your credit report. You have more than one choice to pick!

Article References

https://www.investopedia.com/terms/c/credit_score.asp

https://www.ficoscore.com/about

https://www.experian.com/blogs/ask-experian/how-many-points-does-an-inquiry-drop-your-credit-score/

https://www.experian.com/blogs/ask-experian/credit-education/score-basics/what-is-a-good-credit-score/

https://www.kiplinger.com/slideshow/credit/t017-s003-how-to-raise-your-credit-score/index.html

https://www.experian.com/blogs/ask-experian/what-is-a-hard-inquiry/

https://www.consumerfinance.gov/ask-cfpb/if-a-credit-reporting-error-is-corrected-how-long-will-it-take-before-i-find-out-the-results-en-1339/

https://www.experian.com/blogs/ask-experian/credit-education/report-basics/fair-credit-reporting-act-fcra/

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