Lesson #20: What to do if you find unauthorized inquiries on your credit report

If you have ever reviewed your credit report and seen inquires but you either don’t remember this company or believe you never allowed a creditor or business to make inquiries, what should you do? If you honestly do not believe you authorized someone to make inquiries, there could be a number of reasons why, including fraud.
Here are steps you can take if you suspect the credit inquiry on your report is suspicious.

Contact The Creditor Or Business That Made The Inquiry

Contact the party that made the inquiries and request that they provide proof of authorization. In some cases, it could have been done in error. Tell them to contact the three major credit bureaus and have them remove the inquiry off your credit report. The 3 major credit bureaus are Equifax, TransUnion, and Experian.

If It’s Fraud, Document And Report The Incident

If you believe that identity theft may have been involved in the inquiry, go to the Federal Trade Commission’s website. You can download the identity theft complaint and affidavit form which is a written statement of facts made under oath. You can send this form to your bank, creditors, and the major credit bureaus. You should also file a police report, especially if you plan on placing an extended fraud alert on your account.

Contact the Major Credit Bureaus

When you contact TransUnion, Experian, and Equifax, request to have a freeze put on your account. This will prevent anyone from gaining access to your credit report. This is an important step, because if someone is attempting to steal your identity, they might try again. This will keep yourself, your name, and your identity protected.

Get A Fraud Alert

Contact one of the three major credit bureaus online and have a free 90-day fraud alert placed on your account. This alert will be displayed on your credit report and will let potential creditors know they must verify your identity before extending credit to you. It might be a hassle, but it’s for your own protection. Also, you can contact the three major credit bureaus and add an extended alert for seven years.
Keep in mind, when you place a fraud alert on one of the major credit bureaus, that bureau is required, by law, to notify the other two bureaus.

Dispute Any Unauthorized Credit Inquiries

After you have notified the credit bureaus regarding unauthorized inquiries, an investigation is required. Keep in mind, as inquiries are usually addressed as a “matter of fact”, you will probably have to call the credit bureau or mail in your request and you will not be able to dispute it online.

What’s A Soft Inquiry Versus A Hard Inquiry

A soft inquiry is a review of your credit when you request your credit report or when a lender pre-approves you for a loan or a credit card. These types of inquiries will not affect your credit score.
On the other hand, a hard inquiry can be viewed by potential creditors and happens when a bank, a lender, or even your landlord checks your credit report to approve you for a loan, or whether you will be accepted into a leasing property. In a nutshell, hard inquiries include credit card approvals, loans, and leases.
If there have been several hard inquiries made within a short period of time, this could set off an alarm to potential creditors. Creditors could view this as someone who has either taken out or applied for too much credit that must be paid back.
Keep in mind, a hard inquiry can stay on your report up to 2 years and could potentially lower your credit score. Even though you might not believe this is particularly serious, with FICO scoring this could have an extensive impact on your score.

Student Loans

This is the one exception if a student applies for a car loan or a mortgage. Most lenders will request their credit report even though they are only applying for one loan. In many cases, the scoring may only count these numerous inquiries, over a short period of time, as just one hard inquiry.

How Can I Know If A Credit Inquiry Was Authorized?

There are several ways you can find out if a credit inquiry was authorized or not. In some cases, it could simply be a mistaken identity that should not have been on your report.
According to the senior vice president at TransUnion, the name of the inquiry may be different from the name pulling the report. As an example, if you applied for a store credit card, the name listed on your report might be the name of the bank issuing the card and not the store.
In some cases, you may have forgotten you had authorized an inquiry. You can contact the company listed next to the inquiry on your report and they should be able to give you proof that you did authorize it.
On the other hand, according to TransUnion, an unauthorized hard inquiry could indicate identity theft and should be addressed immediately.

In A Nutshell

If you do not pay attention to your credit inquiries on your credit report, you might find that someone is trying to get a loan, a mortgage, or credit cards in your name. In turn, this could lead to very serious issues that could ruin your credit while and you will be held responsible for the loans.
It’s always an excellent idea to pay attention to your credit report and look into any hard inquiries that you do not believe you authorized and dispute them. You should report whoever conducted the inquiry and report it to the three major bureaus. If the hard inquiry was done in error, the company involved must remove it from your account and report to the credit bureaus.
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