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Reviewing Your Own Credit Reports

On Behalf of | Jan 2, 2013 | Consumer Protection

Under the Fair Credit Reporting Act (“FCRA”) you are entitled to one free copy of your credit report annually.  Additionally, as a consumer you are permitted to review your credit report anytime and often as you like without affecting your score.  However, when any other party reviews your report, this access, called an “inquiry”, is reported on your credit file and depending on whether it is a “hard” or “soft” inquiry, will affect your score.  Credit inquiries are recorded on your report when an entity reviews your credit file.  The name of the company and the date of the inquiry are listed on your report for two years from the date of the access.

Regular inquiries, or “hard” inquiries are the only type of inquiry that affect your credit score.  A hard inquiry is an inquiry initiated by you, the consumer, when you submit an application for credit, insurance or employment.  Some examples of hard inquiries are mortgage loans, credit card applications, home equity loans, bank loans, store card applications.  Additionally, when a collection agency makes an inquiry into your credit file, it is treated as a hard inquiry.  Credit grantors view excessive hard inquiries negatively and are often deterred from extending you credit as a result.  Hard inquiries affect your credit score for 12 months from the date the inquiry was made.

Account Review inquiries, Promotional inquiries – what are known as “soft” inquiries- on the other hand are not initiated by you and are not included in your credit score.  These inquiries are included on your consumer report but not displayed on a report received by lenders.  Account reviews are when your current lenders and existing creditors  take a look at your report to determine how your financial health is.  While these companies may take negative action toward your credit based upon what they see in one of these inquiries, the inquiry alone does not affect your credit.  There are also pre-approved credit card offers for promotional purposes that may appear to you on your credit report.  When credit card companies offer a special promotional offer, they are getting your name as part of a list of people whose credit profile would qualify them for the offer. In these instances, the company making the inquiry is not getting your report, but your name and address (because your report qualifies you) but they must be making a bona fide offer of credit.  In other words, you the consumer should be getting those offers in the mail that coincide with the promotional inquiry.

Keeping a keen eye on your credit file is essential to maintaining good credit and will not negatively affect your credit score.  If you feel your credit report does not accurately reflect your credit worthiness and you are in need of assistance, contact SmithMarco P.C. for a free case review.  We have been protecting consumer rights since 2005.