Each time you apply for credit, your credit reports will place an inquiry at the bottom of your reports. While a few inquiries are fine, too many can result in lowering your credit score and denial of credit. Creditors or potential lenders look at too many inquiries as "Desperate" and base part of their credit decision on those excessive inquiries. In addition, the potential creditor has no idea that those inquiries have not resulted in a recent loan which could disqualify you from being approved.

You should limit your inquiries and dispute any that you do not recall or agree with. Disputing inquiries to the credit bureaus is pointless. They are not responsible for removing those and do not investigate them unless the originating creditor instructs them to. There are different types of inquiries and some are nothing to worry about. The following is an example of inquiries and what they mean.

You reviewed your credit: This is where you have have requested a copy of your credit report. This is a "soft" inquiry and does not negatively affect your credit. It is not seen by potential creditors. (Neutral)

Credit Bureau Review: This again, has no impact on your credit and simply means the bureau reviewed your file. (Neutral)

Creditor review: This is simply a standard review that is done by existing creditors. It also does not impact your credit. (Neutral)

Credit Request: This can be negative if you have too many. Inquiries remain in your profile for 2 years, so too many of this type can be negative and result in denials. (Negative)

Collection agency review: Very negative. If you have any inquiries from a collection agency who has begun collecting on an expired debt (expired under the statute for reporting, which is 7 years) then that does not qualify for a permissible purpose and should be removed. Inquiries from a collection agency are very negative.

IRS: Very negative. Inquiries from the IRS usually tell a potential lender that you are either being audited or have a tax lien pending.

Tenant Screening: This type of inquiry is O.K. It simply shows you are moving or did move and the landlord ran a credit check. (Neutral)

Although inquiries will remain on your file for up to 2 years, those in the last 6 months will count most heavily against you. Therefore, you should review the log to make certain that each inquiry was done with "permissible purpose" as explained in Section 604 of the Fair Credit Reporting Act (FCRA.) The FCRA defines the "permissible purposes" for which consumer credit profiles can be provided to others.

A credit report may be supplied if it's to be used for:

-Credit granting considerations
-Review or collection of an account
-Employment considerations
-Insurance underwriting
-Application for a government license
-With your written permission
-Or in response to a court order
-*FBI investigation

*The new FCRA, enacted in 1996, allows the FBI to access consumer credit reports in connection with an investigation of issues such as counterintelligence. So unless someone fits these categories, they should not be viewing your credit file. Anyone who knowingly and willfully obtains a credit report under false pretenses may be fined under title 18, United States Code, and imprisoned up to two year.

If you don't have a lot of items to dispute, go ahead and send your letter to the credit bureau. However, if you know you are going to be sending the bureau several letters on other items over the next few months, you should try to take care of this with the creditor who requested your file. If you can take care of it by having them contact the bureau directly and deleting the request, then it is just one less letter you will have to send to the bureau yourself.

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