Reviewing Your Own Credit Reports

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.