A credit inquiry is what it sounds like a simple request for access to your personal credit report. Your lenders, landlords, and even potential employers can request access to your personal credit record, and these simple credit inquiries help them gain a quick analysis of whether or not you have been using your card responsibly. An inquiry can range from being quite routine (an inquiry for an auto loan if you’re applying for a new one) to very serious (for instance, if you’ve had a bankruptcy in the past few years).
While credit inquiries are legal, it’s not always clear why they are so common. One reason may be that lenders have to do background checks on all applicants in order to ensure that they don’t have a bankruptcy, for example. The information on the credit report that a lender can obtain about your history will determine the amount of credit you get (and, sometimes, the interest rate that you’re offering). With a credit search, the lender can get a fairly detailed idea of the type of credit that you have available, which can make finding financing that you want much easier.
Another reason that credit inquires are so common could be that many people do not bother to clean up their credit history. The credit reporting bureaus keep track of what’s on your report, but there are still people who fail to make any changes to their records that would erase negative information. If you’re an individual who doesn’t make any changes or is just looking to start rebuilding their credit history, you should know that you are legally entitled to free credit reports annually, free of charge.
Credit companies are also legally obligated to give you this option of obtaining credit. You can request a credit report from each of the credit reporting bureaus, and you should be able to get your reports for free. Once you receive your reports, check them against your personal information, and make sure that everything on them is accurate.
To receive your free credit reports, you’ll need to have a valid Social Security number. These forms must be returned with proper identification and your full name.
Many people make the mistake of thinking that a credit report is going to be as detailed as a credit score, and they assume that any negative information found on their report will be removed. That’s simply not true. All information on your report will still be there and it’s still up to the bureaus to decide what to include or exclude.
There’s a time limit on the length of time that credit agencies can keep information about your personal information. It’s usually one year after your initial request for your personal information, although there are some reports that allow you to extend your report by a few months. This time limit applies to information regarding your personal financial situation as well. If you have an ongoing job or a regular income, such as a mortgage, your lender might only need to keep track of your financial information for as long as the loan payments are due.
If you haven’t used your report in a year, or if you haven’t received any of the reports that you requested in the past six months, the credit bureau won’t give you the free credit report you requested. You must file a dispute, however, in order to obtain your free credit report.
You can get your free credit report every year, or you can request a credit report every time you open a new account or pay off old ones. The credit bureaus send your free credit report about two weeks after the time period mentioned above. Make sure you keep it in a safe place so that you can access it whenever you wish.
You should always remember that all of the data that you put on your credit report was put there voluntarily. While it’s up to the credit bureaus to manage the data, you have the final say over whether to let the company use that data. If you don’t like the way your information is displayed, you have the option to request that information be deleted or rearranged.
You don’t have to worry about credit inquiries when you’re trying to rebuild your credit or rebuild it from scratch. Once you learn the ins and outs of credit, you’ll know when to look at your report and when to delete or rearrange your entries.