Wrong Credit Report
Your credit report is important and an incorrect credit report can be damaging and not only prevent you from obtaining credit but also a job. In some professions a credit check is required. To check your credit report you need to obtain your credit report and look at the information on there. If there is incorrect information recorded, you need to contact the credit reference agency and provide the correct information.
What inquiries mean for you
When you apply for any form of credit, such as a credit card or other form of credit facility, such as a mobile telephone contract, checks are performed on you via credit referencing agencies. Credit card providers, banks and many other institutions are registered with credit reference agencies and this enables the companies to perform searches on you.
When a search is made, this is known as an inquiry. This inquiry, in turn leaves a footprint on your credit file. If you then apply for more lines of credit, you will be building a history of applications which will mount up on your file. This then gives a score or a rating. In essence, a form of risk assessing whether you are a responsible person with credit. If accepted for credit, then there will be ongoing monitoring of your account and details of how your accounts are operated.
Two types of inquiries – soft or hard
A hard inquiry is considered a full search of the all records held on file for you. Soft enquiries will be the minimal information obtained by a lender. Soft inquiries do not affect your credit score and are not seen by other lenders. Hard enquiries are more detailed and are seen by everyone.
A soft inquiry happens when you set up an account for utility companies and arrange to pay for your household fuel on a monthly basis. Or for marketing purposes, when a credit card provider invites you to apply for one of their cards. Hard inquiries are when you have initiated the search yourself, as in applying for some form of credit.
Disputing inquiries on your credit report
If you notice incorrect information on your credit report, such as a search or an account on there which you don’t recognise, this could be an indicator of fraud or simply human error. However, the fact remains there is still incorrect information held on a data base about you and this needs correcting. Incorrect information could be something as simple as an incorrect date or incorrect amounts. Other examples of incorrect information could be old information which should no longer be on there.
To dispute an entry, you need to contact the credit reference agency with the correct information. You can write to the agency or visit their website and complete their online form. Send copy documents supporting your request, rather than the originals to the agency with your letter. The agency have to respond to your request within a period of 30 days. If the original entry was incorrect then you can request the agency send a newly corrected report to any lender who has made a search on you in the last six months. There is a period of time to wait while the dispute is being investigated, so it would be wise not to make any further applications while your file is in dispute.
Future inquiry advice
It is important to be warned about how any inquiry may affect any future credit applications, certainly for mortgage applications. Bear in mind that many inquiries can knock your score down and may show up as a single search. Span your applications around two to three weeks, for instance if you are shopping around for a loan and want the best rate. Credit reference agencies don’t always update information immediately and you could end up with lots of hard searches hitting your file at once and your score being reduced considerably. This will affect future inquiries.