How to Handle Unauthorized Credit Inquiries
With the increase in utilization of mobile banking, many of us can secure our financial stability by simply using our phones.
We can check the amount of money we have, and even identify the time and place any type of purchases were made.
Furthermore, most of us take advantage of the one free credit report we are allowed each year.
Unauthorized Credit Checks
However, there may be some inquiries that we do not recognize.
This may be a sign of an individual seeking credit through fraudulent means, such as taking out credit using your name.
It does not mean that you are subject to identity theft.
One thing we are unaware of is that we can take the same action for unknown inquiries as we do for unknown purchases.
You must deal with this circumstance promptly to minimize the amount of damage it could do to your future credit score.
The steps needed to dispute an inquiry involves:
- Identifying the types of inquiries. There are two types, the first is a “soft” inquiry which is not identified as fraud. This may be a prescreening for credit with various store you often visit, an employer or an insurance agency. It can be a promotional inquiry that may have been acquired through applying for a retail store account. Some of these inquiries may not even be marked as promotional. On the other hand, “hard” inquiries are made when an individual tries to take credit out using your information. This can affect your credit score, decreasing it by a few points, and may even affect your chances of taking out the best loans, car deals, home sales, etc.
- Contact the Creditor. You may call the creditor assigned to that inquiry, and find out what it was for. Most companies utilize a third party to execute any credit checks, and you may not recognize the names. Speaking with the creditor may clear up any confusion you had, or give you insight on how you are subject to fraud.
- Look over your three major credit reports. Equifax, Experian, and TransUnion are three major credit bureaus that companies often go to when seeking your credit report. As mentioned, you are allowed one free report through the website AnnualCreditReport.com a year. You may use each report given and identify if any others have picked up the inquiry. You may dispute any other inquiries made with any of the three, and they will send a verification request to that credit company. Under the Fair Credit Reporting Act, creditors have 30 days to verify your data. If you do not get a response within that time period, they are obligated to remove the inquiry.
- Freeze your credit report. For added security, you may take the option to freeze any or all of your three credit reports. This makes it impossible for any additional creditors to view your report. However, some collection agencies, creditors, and even the government may still view it if they had prior access to it. You may be charged for freezing and unfreezing credit reports. The cost of this action can vary from state to state, you may be charged a fee between $2 to $15. You must contact each individual credit reporting agency to freeze your report. TransUnion offers individuals the option to put fraud alerts on their reports as well. They are legally obligated to notify Experian and Equinox of this alert, and each of your reports will be put on alert. This effect lasts for 90 days after you get the confirmation, and even if the inquiries are disputed, you will still be warned of any fraudulent inquiries during that 90 day period.
If you are subject to identity theft, you must also take additional steps to protect yourself:
- File a complaint about identity theft. The Federal Trade Commission (FTC) allows you to file a complaint online. You will receive an Identity Theft Affidavit directly from the FTC website after you submit a complaint. It is critical that you save and print this document because it is only available to view once after getting it online. This is an important document, that is key to any future investigations needed to be made if you are in fact a victim of identity theft.
- Get the local police department involved. Bring a copy of the Identity Theft Affidavit you received from the Federal Trade Commission’s website to a local police department you reside in. In addition to this, you must also bring a photo ID (government-issued), and a proof of residence (government mail, mortgage, utility bill) to file an official report. This is an essential step to take since it separates those who are actual victims of identity theft from the ones who are just willing to lie to a law enforcement agencies to remove items from their reports. This may be an incredibly simple step that a lot of individuals overlook.
- Send a letter to the creditor. If the responsible party for the inquiry is not helpful when it comes to the unauthorized item in your report, you may send them a letter asking for proof of authorization. The Federal Trade Commission has sample letters available that may serve as a guideline. You must also send them a copy of your identity theft report, comprising of the Identity Theft Affidavit and police report you filed with the department. If they do not take any action to investigate the matters, you may hire an attorney. It is important to save all of the conversations you have with the creditor as it may be used as evidence against them.
Most of the time, following these guidelines will resolve the issue with your credit report, and the unauthorized inquiries will be removed.
However, if no action was taken in resolving your issue, you may file a complaint with the Consumer Financial Protection Bureau against the three major credit bureaus and the creditor involved.
You may also want to hire an attorney specializing in consumer law.