Imagine this troubling scenario: You’re looking at your credit reports, and you spot a hard inquiry that you don’t recognize.
What if these hard inquiries are appearing on your reports — and you don’t believe you authorized them? This may indicate a number of things, including fraud.
Here are five things you can do if you suspect unauthorized credit inquiries on your report.
- Contact the company that made the inquiry.
- Report and document the fraud.
- Notify the credit bureaus.
- Place a fraud alert.
- Dispute the unauthorized inquiry with the credit bureaus.
1. Contact the company that made the inquiry.
You can ask the company to prove that you authorized a credit inquiry and request that it notify the major credit bureaus — TransUnion, Equifax and Experian — to remove the inquiry from your credit reports if it was a reporting error.
2. Report and document the fraud.
If you suspect identity theft because of hard inquiries you don’t recognize, go to the Federal Trade Commission’s IdentityTheft.gov site where you can report an identity theft complaint to send to banks, creditors and the major credit bureaus.
You may also want to file a police report, which you may need to provide if you decide to place an extended fraud alert on your account.
3. Notify the credit bureaus.
You can place a credit freeze — which restricts access to your credit reports — on your account by contacting each of the three major credit bureaus: Experian, TransUnion and Equifax.
The bureau you place the freeze with won’t contact the others, so you’ll need to contact all three credit bureaus yourself.
4. Place a fraud alert.
You can place a free, 90-day fraud alert online with any of the three major credit bureaus. The alert displays on your report and notifies potential creditors to verify your identification before extending credit in your name.
When you place a fraud alert with any one of the major credit bureaus, that bureau is required to notify the other two.
You can also contact each of the three major credit bureaus to add an extended fraud alert for seven years.
5. Dispute the unauthorized inquiry with the credit bureaus.
Once you notify a major credit bureau of an unauthorized inquiry, it’s required to investigate. However, as inquiries are generally considered “matter of fact,” you may not be able to dispute the inquiry online. Instead, consider calling the bureau or mailing your dispute.
Inquiries based on fraud can be fairly easy to remove if you provide proof, says credit expert John Ulzheimer, president of The Ulzheimer Group. But if the company claims the inquiry was authorized, removing it can be difficult.
What’s a hard inquiry?
On your credit reports, you could find two types of credit inquiries (also known as pulls): hard and soft.
A soft inquiry is a review of your credit file that may occur when a lender preapproves you for a credit card or loan, or when you request your credit reports. Soft inquiries don’t affect your credit scores.
Hard inquiries, which can be viewed by potential creditors, occur when banks, other lenders, and even landlords check your credit reports to approve you for credit, which can include credit cards, loans or leases.
Multiple hard inquiries within a short period of time might alarm potential creditors, who may worry that you’ve taken out too much credit to pay back, says Linda Sherry, a spokeswoman for Consumer Action, a consumer education and advocacy organization.
There’s an exception to this — if you’re applying for a student, mortgage or auto loan, many lenders may request your credit reports, even though you’re only applying for one loan. In this case, many scoring models may count these multiple inquiries in a short period of time as one hard inquiry.
A hard inquiry, which can stay on your credit reports for up to two years, can also lower your credit scores by a few points. This might not sound serious, but according to FICO, it may have a greater impact on your scores if you have few accounts or a short credit history.
How can you determine whether a credit inquiry was authorized?
There may be a number of ways you can determine if a credit inquiry on your report was authorized. Sometimes, it may be a case of mistaken identity.
Occasionally, the name of the inquiry on your report may be different from the name of the entity pulling your report, says Ken Chaplin, senior vice president at TransUnion.
For example, if you applied for a retail store credit card, the entity listed on your report might be under the name of the bank issuing the card, not the name of the store.
Or, you may have forgotten that you authorized an inquiry. If you contact the company listed beside the inquiry on your credit report, it should be able to provide proof that you authorized the hard pull.
An unauthorized hard inquiry could be an indicator of identity theft and warrants swift attention, Chaplin says.
Credit Karma has created a way to help you detect identity theft.
With the ID monitoring feature, you can use your email address to search for any accounts that are in any public data breaches. If your information has been exposed in a breach, we’ll let you know some tips and tools to help you take the right next steps.
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If you overlook the credit inquiries section on your credit reports, you could be missing signals that a person or company is trying to open credit accounts under your name without your permission.
It’s a good idea to investigate and dispute any hard inquiries that you don’t believe you authorized with the companies that conducted them as well as with the bureaus reporting the errors.