Maintaining a high credit score is a delicate balance. Too much or too little credit can lower your score, as can inquiries from too many potential lenders over an extended period of time. When you apply for financing, the credit check that results is known as a hard inquiry, and it has the potential to hurt your credit. Although a hard inquiry stays on your credit report for 24 months, its impact is more significant within the first 12 months, and a single hard inquiry may lower your score by up to five points.
Can You Remove Hard Inquiries From Your Credit Report?
You can possibly remove an unauthorized hard inquiry from your credit report by disputing it with the three major credit bureaus: Experian, Equifax and TransUnion. You can also contact the vendor that made the hard inquiry and request that it remove the unauthorized credit inquiry from your record. Mortgage, auto dealers, personal loan, and credit card companies are some of the most common sources of hard inquiries, but they all require applicant authorization to pull credit.
Read More: How to Get a Credit Report
Help From Third Parties
You can generally remove an unauthorized hard inquiry on your own, but you may need help from a third-party credit repair company or attorney in more difficult cases. For example, stolen identity cases, unauthorized pulls, and uncooperative vendors who refuse to remove unauthorized hard inquiries, may require legal help. Beware of online companies offering to remove all hard inquiries – even the authorized pulls – for a fee. Credit bureaus and lenders do not remove inquiries that you authorized, and any promises to make that happen are likely a scam. You may request a credit freeze from the bureaus to prevent future unauthorized hard inquiries. Each bureau typically charges $3 to $10 to freeze credit, preventing most sources from pulling your credit for a certain period of time.
Do Closed Accounts on Your Credit Report Hurt Your Score?
In the event a hard inquiry leads to the opening of a mortgage, credit card, auto loan or other type of financing, closing the account may hurt your credit score. Because credit reports are intended to provide creditors with a detailed history of your credit habits, closed accounts remain on your record for seven or 10 years. A closed account with no late payment history remains on your report for 10 years after it is closed. It can positively impact your score, despite being closed, because the positive payment history continues to contribute to your credit profile. A closed account with late payments remains on your report for only seven years, helping your score to recover sooner after closing a negative account.
Can You Pay Off a Closed Account?
You can pay off a closed account, although your score will not experience an immediate improvement as a result. A severely delinquent closed account, known as a charge-off, reports the balance owed at the time the creditor closed the account, as well as updates to reflect a zero balance if you pay it off afterward. Unless that debt was transferred to a third-party debt collector, paying it off shows up as "Paid Charge Off" or the like, on your report. If the debt was sent to a collection agency, the original lender reports the balance as zero. You must then pay the new collector directly to have the account updated and reflected as "Paid Collection."
A hard credit inquiry, also known as a "hard pull" or "hard check," remains on your credit report for two years from the date your credit is run.
Karina C. Hernandez is a licensed real estate agent since 2004 in San Diego. She has written legal articles pertaining to housing and real estate for multiple internet channels over the past 10 years. She has a B.A. in English from UCLA.