Any time a party requests a copy of your credit report a record of the request is placed on your credit report. This record is formally referred to a credit inquiry. An inquiry is simply the name of the company that accessed your credit report and that date of the access.
Inquiries, unfortunately, can also occur when someone applies for credit in your name fraudulently. But those unauthorized inquires can be removed by understanding how the inquiry system works.
Discovering Unauthorized Inquiries
It is extremely important for consumers to be proactive in monitoring all three of their credit reports, one each from Equifax, Trans Union, and Experian. After all, no one is going to take on this task for you and nobody cares about your personal credit more than you.
Ultimately it is your job and yours alone to ensure that the information that appears on your credit reports belongs there.
You have the right to a free copy of all 3 of your credit reports every 12 months from the website www.annualcreditreport.com. Claim them religiously. Routinely checking your credit reports is the best way to discover any unauthorized inquiries.
What to Do With Unauthorized Inquiries
If an unauthorized inquiry from a lender shows up on your credit reports then it may be a warning sign that you have been the victim of identity theft. This fact is especially true if multiple unauthorized inquiries show up on your credit reports within a short period of time.
Thankfully, the Fair Credit Reporting Act gives consumers the right to dispute any information on their credit reports with which they disagree, and that includes inquiries.
Should any unauthorized inquiries show up on your credit reports it is in your best interest to let the credit bureaus know about the issue immediately, as in right now. If the credit bureaus find the questionable inquiries to be fraudulent then they will be removed from your credit reports.
At the same time the credit bureaus will place fraud alerts on your credit reports alerting any future lenders that someone may be applying for credit in your name.
The Credit Monitoring Strategy
Credit monitoring services subscriptions that passively monitor your credit reports for changes that could be indicative of true name fraud. For all the good they do, they are not effective in preventing unauthorized inquiries from occurring. They are, however, a great way to be notified of any new inquiries almost immediately.
If you subscribe to a monthly credit monitoring service and a fraudster applies for credit in your name (causing a lender to access your credit report) the new inquiry will trigger an alert to be sent to you – typically via email or text message.
If you do choose to subscribe to a credit monitoring service you also want to be sure to subscribe to a company which monitors all 3 of your credit reports to ensure comprehensive protection.
The Credit Freeze Strategy
Without question the single most effective way to protect your credit reports from fraudsters is the credit freeze, also referred to as a security freeze. Credit freezes are the Fort Knox of credit protection strategies.
If you place a credit freeze on each of your three credit reports then you are virtually guaranteed to protect yourself from becoming a victim of credit based identity theft.
When a credit freeze is placed on your credit reports they are actually taken out of circulation. New lenders are prevented from accessing your credit report or credit score when a freeze is in place, which means if a fraudster applies for new credit in your name the lender won’t underwrite an account because they can’t get your credit report.
The credit freeze doesn’t result in the removal of unauthorized inquiries but rather will prevent them from happening in the first place. Each of the credit bureaus will charge a very small fee whenever you place a freeze on your credit report however if you have been the victim of identity theft in the past the fee can be waived.