How to Dispute Hard Inquiries on your Credit Report

Hard credit inquiries will appear on your credit report when you apply for a product and you authorize a company to check your credit before approving your application. This can happen when you apply for a credit card, a loan, a mortgage, or even a phone plan, just to name a few examples. A hard credit inquiry always requires your authorization.

If you notice hard credit inquiries on your credit reports and you didn’t authorize them, it’s important to take swift action. While a hard inquiry won’t usually make a major dent in your credit score, it could stay on your credit report for three years or even longer. 

If your credit score is close to falling from a good credit score to a fair credit score (or worse yet, from a fair to a bad credit score), then it's all the more important to manage even small hits to your score. Furthermore, you want to make sure no one is accessing your credit report who shouldn’t be in case you’re the victim of identity theft. 

Here are the main steps involved in disputing hard credit inquiries:

• Check your credit reports

• Identify inaccurate and unauthorized hard inquiries

• Gather documents to back up your claim

• Speak with an agent at the creditor's credit department

• Send a dispute letter to the credit bureaus

Check your credit reports

It’s vital to regularly check your credit reports to ensure your credit score stays stable (or increases) and that there’s no unauthorized financial activity on your file. Canada has two credit bureaus, Equifax and TransUnion, and you should monitor your credit score and file with both of them as they can be different as both use somewhat different credit scoring models. You can download your Equifax credit report for free by signing up for Borrowell.

Common errors in your personal information can include things like a wrong address, name misspellings, or an incorrect date of birth. Mistakes in your credit card and loan accounts could be things like a payment you made on time being recorded as late or even being sent to collections. You can dispute late payments and dispute collections with Equifax and TransUnion in a similar fashion to disputing credit checks.

Additionally, there is a set timeline for how long items are supposed to stay on your credit report (usually six or seven years), so make sure your credit reports don’t show any outdated negative information that should have fallen off your file. 

Identify inaccurate and unauthorized hard inquiries

Look for a section on your credit report entitled “Inquiries” or “Credit Inquiries to the File.” Information in this section may be organized into two sections: credit related inquiries (which means hard inquiries) and non-credit related inquiries (which is another way of saying soft inquiries). Soft inquiries (such as when you check your own credit score using Borrowell) don’t have any affect on your credit score and so, in general, aren’t really cause for concern. 

If, however, you notice any recent hard inquiries that you didn’t authorize or that are related to a loan or credit card you didn’t apply for then you should immediately act to have them removed. Note that if the hard inquiry is legitimate because you did apply for a loan or credit card, the credit bureau won’t remove it. It will stay on your file (and affect your credit score) for three years or possibly even longer. 

Gather documents to back up your claim

If you are going to dispute a hard inquiry, you will need to provide supporting documentation so that a creditor or credit bureau can adequately investigate your claim. The required documentation will depend on the nature of the error you want to dispute. If you think a creditor got your name or identity mixed up with someone else’s, you’ll need to provide official proof of your personal information. This proof could be a driver's licence, birth certificate or even a utility bill to show proof of address. If you believe you’ve been a victim of identity theft, you’ll need supporting evidence like bank or police statements or letters from creditors supporting your claim.

Speak with an agent at the creditor's credit department

You can try to reach out directly to the company listed on your credit report (usually your report will contain the phone number and/or address of any company that did a hard pull) as having made an inquiry and confirm they did the hard pull and why. Ask them to contact the bureau to have the inquiry removed if you did not authorize them to do a check on your credit file. 

Send a dispute letter to the credit bureaus

If you can’t get satisfaction from the creditor who is listed as making the inquiry, your next move is to reach out to Equifax and/or TransUnion directly and lodge an official credit report dispute about the hard pull. By law, a credit bureau must investigate any information on your credit report that you allege is an error. 

What Would be Considered a Hard Inquiry?

Hard inquiries usually happen when you make loan applications or apply for a mortgage or any credit cards. To ensure you are creditworthy, potential lenders will check your credit score and your credit file. Because it can cause a drop in your credit score by a few points, you will usually have to give permission to a financial institution to perform a hard credit check. 

Hard credit inquiries are one of the factors that make up your overall credit score. However, credit inquiries only account for about 10% of your score and aren’t nearly as important as things like payment history and credit utilization, which account for 35% and 30% respectively. Credit history (15%) and credit mix (10%) account for the rest of your score. 

Because it accounts for only 10% of your rating, a single hard inquiry generally has a negligible effect on your credit score, decreasing it by not much more than five or so points. If numerous hard pulls show up on your credit report in a condensed period of time, however, your score would take more of a serious hit and significantly impact your credit worthiness.

Be aware that if, for example, you’re actively looking for a mortgage or a loan, multiple hard inquiries in a short period of time from various creditors won’t usually have a negative impact on your credit score. That’s because multiple inquiries for the same kind of loan within a set period of time (generally from 14 days to 45 days) are usually regarded by credit bureaus as one overall inquiry. Though each inquiry will be listed on your credit report, they will just be calculated as one inquiry. 

This is not true for credit cards, however. Each time you apply for a new credit card, each  application will show up as a hard inquiry. These credit card applications can add up to a lot of hard credit pulls if you’re not careful. So if you’re looking to get a new credit card, make sure you only apply for one that you’re confident about getting. You can use Borrowell to compare credit cards and see your approval chances based on your credit score, even before applying. This can help you avoid making too many hard credit pulls.

How Many Points Does a Hard Inquiry Deduct From Your Credit Score?

As Canada’s credit bureaus don’t reveal the exact algorithms they use to calculate your credit score, it’s impossible to say exactly how much a hard inquiry will cause your credit score to decrease. Obviously, the higher your credit score, the better you are positioned to weather a few negative hits. 

Does Removing Hard Inquiries Increase Your Credit Score?

Because you’re likely looking at a decrease of not more than five points on your credit score for a hard inquiry, removing it will only have a minimal effect. However, if you have a credit score that’s hovering near poor or below average, then those five points could be very precious indeed and it would certainly be worth your time to get the hard inquiry removed from your file. 

How to Dispute an Equifax Credit Report

You can lodge a dispute with Equifax online via their website or by mail by printing out the required forms and sending them in to the address indicated. 

How to Dispute a TransUnion Credit Report

TransUnion allows you to dispute a credit report error online, by mail or by phone. You would just need to fill out the specified forms or speak directly to a representative by phoning the number indicated on the website. 

What Can I Expect as a Result of My Credit Report Dispute?

Equifax and TransUnion have a similar dispute process. After you submit your required forms, Equifax and TransUnion will review all the information you give them and even contact the creditor to confirm whether or not they did a hard pull on your file. If necessary, they may contact you for additional information. If there is an error, the credit bureau will update your credit file. If the creditor states that the hard inquiry was legitimate, the credit bureau will not remove it from your report.

Once the investigation is completed, both bureaus will send you a letter or email outlining the results of their investigation. Equifax states that it can take from 5 to 20 business days to process a dispute. TransUnion estimates that investigations take up to 30 days.