Does Removing Hard Inquiries Increase Credit Score?

A hard inquiry is a record on your credit report indicating that a lender has requested to review your credit history as part of an application for new credit, such as for a credit card, a loan, or other financial products. Understanding these inquiries is important, as their removal can sometimes impact your credit score.

Understanding Hard Inquiries and Credit Scores

A hard inquiry, also known as a “hard pull” or “hard credit check,” occurs when a lender reviews your credit report after you apply for new credit. These inquiries assess your creditworthiness and are triggered by applications for credit cards, mortgages, auto loans, or personal loans.

A hard inquiry is recorded on your credit report. While it can cause a small, temporary dip in your credit score, its overall impact is usually minor. This slight reduction signals to other potential lenders that you have recently sought new credit.

Hard inquiries remain on your credit report for up to two years, but they typically only influence your credit score for about 12 months. These differ from “soft inquiries,” which occur when you check your own credit report or when a lender pre-screens you for an offer; soft inquiries do not impact your credit score.

Credit scoring models may treat multiple inquiries for the same type of loan, such as a mortgage or auto loan, within a specific shopping period as a single inquiry. This allows consumers to compare loan terms without significant negative impact. This “rate shopping” period can range from 14 to 45 days. However, this exception generally does not apply to multiple applications for credit cards.

Legitimate Removal of Hard Inquiries

Removing hard inquiries from your credit report is only possible under specific, legitimate circumstances, primarily when the inquiry is inaccurate or fraudulent. The process involves gathering information and then disputing the inquiry with the credit bureaus.

Preparatory Phase

Obtain copies of your credit reports from Equifax, Experian, and TransUnion. AnnualCreditReport.com is the official source for one free report from each bureau every 12 months, helping identify unrecognized hard inquiries.

Once you have your credit reports, review the inquiry section. Look for any hard inquiries you did not authorize, such as those from companies you never applied to, or those resulting from identity theft. If you suspect identity theft, gather supporting documentation like a police report or an affidavit of identity theft. For errors, note the inquiry date and the name of the creditor.

Procedural Phase

If you identify an inaccurate or fraudulent hard inquiry, dispute it directly with the credit bureau that reported it. Each of the three major credit bureaus provides an online dispute portal, and you can also send a dispute by mail. Sending a dispute letter via certified mail can provide a valuable record of your communication.

Your dispute letter should state the inquiry is unauthorized or erroneous and request its removal. Include your full name, address, Social Security number, and date of birth. Provide copies of supporting documentation, such as the relevant credit report section or evidence of identity theft. Do not send original documents.

Upon receiving your dispute, the credit bureau is required to investigate the item, typically within 30 to 45 days. They will contact the creditor that made the inquiry to verify its legitimacy. If the investigation concludes that the inquiry was unauthorized or inaccurate, the credit bureau must remove it from your credit report and notify you of the outcome.

Comprehensive Credit Score Improvement

While managing hard inquiries is part of credit health, focusing on broader factors can lead to more significant credit score improvements. Credit scores are based on several weighted components. Understanding these components can guide effective strategies for enhancing your financial standing.

Payment history holds the most weight, typically accounting for about 35% of your FICO Score. Consistently making all payments on time across all credit accounts is paramount, as even a single late payment (30 days or more overdue) can negatively impact your score.

Amounts owed, specifically your credit utilization ratio, usually represents about 30% of your FICO Score. This ratio compares the total amount of credit used to total available credit, particularly for revolving accounts. Maintaining a low credit utilization ratio, generally below 30%, suggests effective debt management.

The length of your credit history contributes around 15% to your FICO Score. This factor considers the age of your oldest account, the average age of all accounts, and how long specific accounts have been open. A longer history of responsible credit management indicates less risk, and maintaining older, well-managed accounts can positively influence this component.

Your credit mix, assessing different types of credit accounts (e.g., installment loans and revolving credit), makes up approximately 10% of your FICO Score. Handling various types of credit responsibly is viewed favorably. However, it is not advisable to open new accounts solely to diversify your credit mix, as this factor has a smaller impact.

New credit, including hard inquiries, accounts for about 10% of your FICO Score. While applying for new credit is sometimes necessary, opening multiple new accounts in a short period can signal increased risk. The impact of individual hard inquiries is minimal and temporary, but frequent applications might lead to a slight score reduction. Prioritizing heavily weighted factors yields more substantial credit score improvements.