Your borrowing history determines financing options and interest rates, but that’s not all. The score it defines is checked by lenders, recruiters, insurers, and landlords. To improve the status, you may want to remove hard inquiries from the credit report. Sometimes, this may be impossible or unnecessary.
Experian, TransUnion, and Equifax are all legally obliged to delete unverifiable, unsubstantiated, or outdated information from your records. Hard inquiries, which reflect history checks, may also be erased from your file in some cases. Discover when you can and should get rid of hard inquiries, what this involves, and how long it takes.
What Are Hard Inquiries?
When you apply for a card, loan, or another financing option, the lender makes a decision after looking at your history. The summary of your borrowing experience helps them evaluate solvency. Your request permits access to one or more of the reports. This is when hard pulls or hard inquiries appear.
The term reflects the nature of these marks, as they impact the score. Multiple applications in quick succession can be damaging to your status. They make you look desperate for cash, so lenders doubt your creditworthiness. As a result, they are reluctant to extend credit or offer low interest rates.
On the other hand, there are credit inquiries of the “soft” type. They are not related to new financing. For example, your records may be accessed by a recruiter, an insurance company, a landlord, or yourself. Lenders leave soft pulls when they generate pre-approved offers. Such information is innocuous. It has zero influence on your eligibility in the eyes of the institutions.
How To Remove Hard Inquiries?
Despite its connection to your score, the impact of this information is modest. On average, every new entry knocks several points off the total, and the effects fade quickly — in a few months. Therefore, removing hard inquiries could not be worth the effort. Besides, it is only possible if they are erroneous.
One inquiry can hardly prevent you from securing a loan. But what if your records are accessed multiple times for different purposes and within a short period? This is when the effects are the most pronounced. Removing a hard inquiry can also help if you have not been a model borrower in the past. In this case, our tips to raise credit score will also come in handy. If you feel that the entries are false, challenge them as soon as possible.
Here is a caveat: an unfamiliar company name does not always point to fraud. Such entries may be legitimate, so you cannot get inquiries off the credit report. For instance, you may have provided your information to:
- a home repair vendor who then checked your background;
- a car dealership that contacted lenders to get the best conditions on an auto loan;
- a mortgage servicer or website that sent it to one or more lenders.
- A retailer that sent the data to its financing partner so you could get a store card.
What to Do
In case of unfamiliar pulls, you could try contacting the company mentioned on the records. If the data is not legit, remove hard inquiries. This could add a few points to your score. Here is what to do to eradicate unverifiable data:
Step 1. Collect the Information
First, gather your reports from three nationwide bureaus. Equifax, TransUnion, and Experian compile histories independently, so each of them may include false inquiries and other errors. As we have mentioned, checking your own records never affects your score.
Previously, every American was entitled to one free copy per bureau per year. Now, until April 20, 2022, you can download the files weekly due to the economic toll of Covid-19. The only official source is www.annualcreditreport.com — do not look elsewhere.
Step 2. Identify Suspicious Details
Armed with the files, you may get down to business. Pore over the records going line by line. Review them for any mistakes and fraud. The most common errors include:
- accounts that do not belong to you,
- false legal events like bankruptcies or evictions,
- missed payments that never happened,
- incorrect balances, and
- the absence of positive information.
Unexpected hard inquiries may point to technical errors or identity theft. You may discover that fraudsters have obtained loans in your name (or tried to do this). Any incorrect, false or outdated information may be disputed formally.
Step 3. Send a Hard Inquiry Removal Letter
Every US citizen has a right to file formal disputes with the bureaus. You can challenge any information on your reports. The institutions may be reached by email, phone, or via their websites. You will need to compose a dispute letter using a special template (find it here) and send it by certified mail. Request a return receipt to have hard evidence of the exchange.
No single format exists. Express your concerns clearly and stick to the point. List the dubious items with any comments, such as suspicion of fraud. After your letter is received, the recipient will have 30 days to conduct an internal investigation. Sometimes, this window is extended to 45 days. Eventually, the agency will accept the changes, reject them, or ask for more information.
The bureau is obliged to erase unverifiable and unsubstantiated data. If you are not happy with the results, consider a redispute. It is also advisable to consult an attorney who specializes in the FCRA.
Some sources recommend including a statement of disagreement. The bureaus allow you to add up to 100 words to your reports. The benefits, however, are highly dubious. This data will not help your score, and most lenders will not see it.
How Do Inquiries Affect Credit Score?
In comparison with derogatories like repossessions, these items are relatively harmless. Consumers with decent scores can wait for them to vanish naturally. To understand if action is necessary, check your total on My FICO or via apps like Credit Sesame. Each removal can give up to 5 points.
A high density of hard pulls can potentially damage the total. However, this depends on their type. Multiple applications for the same service are treated collectively — as one inquiry. FICO and VantageScore have different windows for rate shopping — 45 days and 14 days, respectively.
If you request different types of credit — mortgage, credit cards, auto loans, etc. — within a few weeks, this will look suspicious. Still, you should look at the rest of your records to see if it matters. The impact is relatively small, as these entries affect only a 10th of your FICO total. For VantageScore, the effects are also slight.
How Long Do Hard Inquiries Stay On Your Credit Report?
Generally, any information of this kind should disappear in 24 months. The impact on your score is also fairly short-lived — it will last up to 12 months. Indisputable items will not vanish before expiry. All you can do is wait until the credit inquiries drop off on their own.
If the data is false, initiate formal disputes and have it deleted. The duration will depend on the number of items and reports. Note that all three agencies work independently. You need to contact the bureaus that made the mistakes, as no other organization may correct their records.
Each internal investigation will take between 30 and 45 days. If the inquiries are erased, the score will jump automatically. Typical cases of fixing span 3-6 months. Considering the impact of hard pulls, disputing credit inquiry data could also be unnecessary. If no fraud has been detected, and your history is otherwise correct, just wait.
Should You Get Help With Removing Hard Queries?
As you can see, these entries have only a slight impact on your score. They can be deleted in case of fraud or reporting errors. Opening disputes by yourself is not the only option, as credit fixers can do it for you. Check creditrepair.com reviews to see how this works. A professional agency will help you remove hard inquiries fast.
THE ACCELERATION TOWARDS A MOBILE FIRST ECONOMY
By Brad Hyett, CEO at phos
Over the last year, we have seen a big shift towards contactless payments. Fuelling this has of course been the coronavirus pandemic, which has made the public hesitant to handle cash due to the health concerns.
As multiple national lockdowns forced physical stores to close, and customers demanded easy, cash-free payment options, merchants had to quickly adapt. The result? An increased provision of pay and collect services.
In the UK alone, 83% of people use contactless payments according to data from the Office of National Statistics.
So it’s vital that merchants are equipped with the most efficient payment solutions, as the UK heads towards a mobile-first economy.
Proliferation of contactless payments
In 2020, 90% of UK card payments were contactless. This equates to an increase of 12% on the year prior, despite the total number of payments made falling by 11% from 2019 to 2020. Moreover, the affordability of smartphones has increased significantly over the last decade. And it’s estimated that 84% of UK adults now own one.
We’re Seeing merchants embrace more efficient and cost effective payment methods in response. While physical payment terminals are often too expensive for many small businesses, software point of sale, or SoftPoS, enables merchants to turn hardware that they already own – i.e. their mobile device – into a point of sale terminal.
With merchants increasingly adopting these innovative technologies, contactless payments will continue to gain popularity among the general public. In 2020, 13.7 million people in the UK either didn’t use cash at all or only used it to make a single purchase. That’s double the same figure from the previous year.
Changing consumer demand
Now more than ever, consumers are aware of how innovative payment solutions can add efficiency to their daily lives. As such, consumers now demand better payment services, including reduced queuing times, checkoutless stores, and bespoke loyalty schemes.
Businesses such as Mercedes offer an end-to-end digital car purchasing service, so customers can go through the whole car purchasing journey from the comfort of their own home. This includes car deliveries, financing, insurance and more.
Meanwhile, eCommerce giant Amazon has started trialling checkoutless ‘Go’ stores, speeding up the shopping experience by eliminating the queuing process altogether. The days of waiting for a table at a restaurant are also over, as more people have grown used to booking in advance.
Hence, it’s important that we empower small businesses to remain competitive and provide them with the payment solutions to meet customer demand.
The digital payments revolution isn’t slowing down anytime soon. By 2026, only 21 percent of transactions will be made using cash.
The US might have been slow out of the gate, but it’s starting to see increased adoption of mobile payments. In-store mobile payments grew by 29% in the States last year alone.
This growth was primarily fuelled by Gen Z-ers and millennials. Latest projections show that there will be 6 million new mobile wallet users by 2025, with millennials accounting for 4 million of this figure. These two generations, the former in particular, have grown up with mobile banking.
For most Gen Z-ers, their first foray into financial services was with a challenger bank like Starling or Monzo. These banks are able to offer online features such as ‘split the bill’, fee-free withdrawals abroad and much more to cater to the modern financial needs of the younger generation.
The Middle East experienced similarly sharp increases in contactless payments. From 2019 to 2020, there was a 200% growth in contactless transactions. This shift towards a mobile-first economy in the region was inevitable; the pandemic merely accelerated this shift. A recent study showed that 80% of people living in the Middle East planned to continue using contactless payments post-pandemic, with speed and security being the main draw.
The future is mobile
As parts of the world now start to come out of lockdown, there’s an openness to new solutions and a widespread acceptance of new technologies.
It is now a case of when, rather than if, we’ll see a permanent shift to cashless in the future. For businesses, embracing digital innovation will be key to remaining competitive and keeping pace with consumer demand in this fast-changing payments landscape.
HOW MERCHANTS CAN IMPROVE THE ONLINE PAYMENTS EXPERIENCE
By Alan Irwin, Senior Director of Product at Global Payments UK
The dramatic increase in online shopping over the past 18 months has encouraged many businesses to invest in developing their omnichannel shopping experiences. The reasons vary – some are keen to capitalise on the trend of older shoppers migrating towards ecommerce and some are trying to make up for loss of sales in brick-and-mortar stores during the pandemic. It is also true that many businesses are shifting their models to sell direct to consumers to avoid high marketplace fees and are therefore building their ecommerce channels for the first time.
The checkout experience is arguably the most important and delicate part of the ecommerce transaction, as it can make the difference between a happy customer likely to return, and a shopping cart abandoned out of frustration and confusion. A survey from March 2020 suggested that 88% of online shopping orders were abandoned, i.e. not converted into a purchase. A seamless, customer-centric online payment experience is therefore critically important in ensuring completed transactions. But with so many payment providers available, what should businesses be looking for when trying to keep friction to a minimum?
Keep clicks to a minimum
Less touchscreen interaction equals less abandonment. Adapting the payment page to fit any device and supporting popular mobile digital wallets like Google Pay ensures a seamless, stress- and hassle-free checkout experience for the customer and keeps clicks to a minimum. Friction can present itself in the most minor features – for example, when the customer is navigating the payment form, the appropriate keypad should be shown to the customer when required. It’s much easier to enter a card number using the dial pad instead of switching between QWERTY keypad layouts.
Simplifying online forms with autofill and tokenisation also significantly reduces friction at checkout and shortens necessary time taken. Ensuring checkout forms are tagged correctly for “autofill” is a great way to offer customers a single-click to input the payment, shipping, and billing data that they have stored in their browser profile. Similarly offering a guest checkout option will help convert customers who are in a hurry or looking for a one-off purchase. This can also be achieved by offering to store the payment details (called ‘tokenisation’) for express repeat and one-click purchases.
Make it easy to understand
A tailored payments approach can increase both domestic and international global sales. By offering a checkout experience in the customer’s language, the option to pay in their currency of choice, and use their preferred method of payment (whether it’s PayPal, Alipay or card), businesses can build loyalty quickly and put customers at ease. It is equally important for merchants to ensure they always display simple direction and information about next steps to instil confidence and prevent customer drop-off. The customer should be informed of what is happening at every stage in the process, for example, whether they will proceed to SCA (Secure Customer Authentication) next or go straight through to completion.
In addition, validating forms in real-time means merchants can highlight potential errors to the customer early on, and payment providers should provide this functionality. This could be an invalid expiry date, an incorrect digit in the card number or incorrect CVV number based on card type. When issues are only flagged at the end of the process, this forces the customer to go back through the steps to figure out the error. Real-time signposting of problems removes this potential friction and reduces the potential for a declined transaction.
Ensure seamless security
Merchants should work with a payment partner who offers the right blend of security and compliance management without it coming at a cost to the end-to-end checkout experience for the user. Instilling trust and security in your checkout flow while utilising the right solutions to drive seamless authentication flows will increase customer confidence and help prevent drop-off.
The greatest level of security and control comes from either utilising hosted payment fields that the
merchant can natively integrate into their checkout flow, or a hosted payment page where they can
manage the look and feel. Showcasing your brand on the checkout page with trust signals and logos also adds to building trust with the customer.
Staying ahead of regulations is also important. Secure Customer Authentication (SCA) will soon be mandatory in the UK for all eligible digital transactions, and this doesn’t have to be a friction-full process. Tools like Transaction Risk Analysis (TRA) and Exemption Optimisation Service (EOS) can quickly score transactions and drive exemptions where there is the right blend of transaction risk.
The devil is in the details
These three rules for successful ecommerce checkout experiences may seem straightforward, but it is important to apply them at a micro level. It can take only one minor point of friction to cause a customer to abandon their cart, and this will inevitably be replicated across other similar customers. It is critical to identify friction points early on and anticipate customer needs throughout the process. Discussing these points and any opportunities to improve customer checkout experience with your ecommerce team and payment provider is an important first step towards ensuring your entire shopping experience remains competitively seamless and loyalty is won. It may be that your payment provider cannot address them, in which case it could be time to move on in order to stay competitive.
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