A credit inquiry is when a third party, such as a mortgage company or a credit card company, requests a copy of your credit report and/or credit score from any of the three credit bureaus. In fact, they are “inquiring” about your credit worthiness.

Do these inquiries negatively affect your credit report/score? That depends. An occasional inquiry for things like a car, house, or education will not be held against you when determining credit risk.  The ones that can negatively affect you are the inquiries for new credit cards or lines of credit. These typically deduct 5 points from your credit score for each inquiry of this type. The ones listed will usually be only recent ones, within a year or so.

Now, if you have several credit card inquiries in a short amount of time, then that will definitely lower your credit score. Multiple clustered inquiries for credit cards put you in a high risk category for the lender. They will wonder why you are scrambling to get a bunch of spending credit in a short amount of time, and will make their decision accordingly. Other credit inquiries that get clustered, such as an automobile loan, are not held against you. To them it just looks like you are shopping around for the best deal on a car you can get, and every place you go they have to run your credit score/report.

Other companies can request a copy of your credit report without you even knowing, unless you have a security freeze on the account. Usually, debt collection agencies will check your credit report periodically so they can stay up to date on all of your past debts and new ones, as well as any updated personal information. They are not required, by law, to inform you that they will be checking your credit.

If you have multiple inquiries on your credit report, you should write to the credit bureau and request that they be removed because you never gave permission to any of the people listed. You will almost always get some of them removed, and the rest will remain, but it is worth the effort. Building and/or fixing your credit is like saving pennies. Each penny by itself is not worth much, but as time passes, the pennies will eventually add up to a large amount of money. Every small step you take will only add to your overall score.

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When you fail to pay a debt, after a certain amount of time it goes into “collections”. This simply means that the debtor sells the unpaid account at a discounted rate to a collection agency that specializes in collection tactics, such as calling every 10 minutes and putting a block on your bank account (yes they can do that, if a judgement is issued). Sooner or later, probably sooner, your credit report will show the collection agency and the debt amount. This is very bad for your credit. There are some options you have that you may not realize.

Erroneous Information

If the debt is not yours, then it is not legal to have it on your credit report. To handle this, just send a credit dispute letter to the credit bureaus and tell them what is going on. If the debt truly is not yours, they will find out and remove it from your credit report.

Debt Validity/Integrity

If you do have a debt with the collection agency on the report but for a different amount than reported, or if you have already paid it, then you can ask the credit bureaus to validate the debt. They will give the collection agency a set period of time, usually 30 days, to provide proof of the debt and debt amount. If they fail to do that for any reason, the debt is removed from your credit report.

Seven Years of Bad Luck Doesn’t Just Apply To Mirrors

After seven years from the date that the account went delinquent, that debt must be removed from your credit report completely, never to be reported again. Some debt collectors, being the spineless rats that they are, actually try to change the dates of the debt to make it eligible for reporting longer. This is done frequently and it is why many people see debts fifteen years old on their credit reports. They think that it can never come off, but that isn’t true. If your debt is more than seven years old, then send a dispute letter to the credit bureaus and provide proof, if you can, of the date of the delinquent account. The credit bureau will likely find out the true date and remove it.

Deletion for Sale

One option is to offer the debt collection agency a one-time payment in exchange for them deleting the record off of your credit report. They will probably say no, but keep pushing them. This is like a game to them really. They are not selling a product, they don’t create anything, they contribute absolutely nothing to society but chomping at the bit of middle class America. You must make them think that you will never, ever, make a payment on the debt. Tell them that they should take the offer now or settle for nothing. If you are persistent, they might eventually budge. They will try to get as much as they can from you. So low ball them first. Offer a ridiculously low amount, so when they come back with a counter offer it will be around the amount you truly intended on paying. Most importantly, make them send you a letter of debt dismissal and settlement. THIS IS IMPORTANT. It is your only physical proof that they agreed to remove the debt.

In the end, your only option may have to be to pay the debt. I suggest that you call them and arrange a payment plan. Even if it is ten dollars a month, it is something, and it will stop these idiots from calling your house every ten minutes.

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