Have you ever had your credit score drop unexpectedly? Shocked by rejection of a credit application? These situations signal the possibility that your credit rating fell because someone made unauthorized hard credit pulls from your reports at the three consumer credit reporting agencies (CRAs).
You can fight back against credit pulls for which you did not grant permission. Read on for ways to regain your good credit.
Soft v. hard pulls
A soft pull, also called a soft inquiry, requests your credit score from a CRA. Only you may view the data. Only certain parties may make soft pulls without your permission and only for specific purposes. For example, your bank may make soft pulls of your credit score for your eyes only as a free personal service. Soft pulls do not negatively impact your credit score.
Hard pulls are those that lenders and creditors make with your permission – usually that you give in writing – such as when you apply for a loan, mortgage or credit card. You want them to access your good credit score so they will extend credit to you.
Hard inquiries remain on your reports for two years and can lower your credit score, especially when made frequently. It may look like you are desperately shopping around to find a source for a loan or other credit, suggesting that you may not be a good credit risk. (But if you authorize a cluster of hard pulls from similar creditors when you are trying to make a major purchase like a vehicle, the credit agencies usually consider this pattern to be one legitimate pull.)
Unauthorized hard inquiries
To see if someone made a hard credit pull without your consent, review your credit reports. (This is recommended on a regular basis even if you do not suspect problems.) Go to Annual Credit Report.com to obtain free reports from the CRAs. Each report has a section containing hard pulls that a third-party made. If you do not recognize a pull, there are actions you can take.
Correcting unconsented-to inquiries
Hopefully, the mysterious hard pull was either a mistake or an inquiry you do not remember authorizing. Both scenarios are quite plausible. Contact the requesting party to find out what happened. Sometimes a clerical or computer error generates an unauthorized credit inquiry. The inquiring party may be willing to proactively request that the CRA correct the report.
Otherwise, to challenge an unauthorized pull, start an official dispute online at each involved CRA (Experian, TransUnion or Equifax). The credit bureau has 30 days to respond and must correct the report if it agrees with you.
It is also possible that fraud or identity theft could be involved. Someone may be masquerading as you, attempting to use your good name to get credit or loans or make purchases. Several steps can begin the process of recovering, including:
- Report the identity theft to the Federal Trade Commission (FTC).
- File a police report.
- Contact anyone fraudulently given your personal information to close any accounts opened in your name.
- Ask the CRAs to delete the unauthorized credit pulls from your reports.
- Consider adding a fraud alert to your credit reports to alert parties trying to pull your credit information.
- Place a credit freeze at each CRA so the identity thief cannot open accounts using your identity.
- Let your banks and others with whom you do business know about the fraud and initiate appropriate account closures and new passwords.
An experienced lawyer can advise you of other actions that may be useful.
Talk to an attorney
Consult legal counsel for information, advice and guidance should you discover unauthorized credit pulls, especially if you suspect fraud or identity theft. The involvement of a lawyer in contacting credit bureaus, lenders or creditors may speed the process of correcting your report and repairing your financial reputation. Counsel can help seek refunds of fees or penalties assessed for fraudulent activity in your name.
An attorney can assess whether you are a candidate for filing a lawsuit under the federal Fair Credit Reporting Act (FCRA) for compensatory damages, legal fees and punitive damages in especially outrageous situations.