A hard inquiry on your credit report is a record that someone asked a credit bureau for your file. If you did not apply for anything, did not ask anyone to check your credit, and have no existing account with the company named, the question is not how to remove the entry. The question is what right that company had to look.
The Fair Credit Reporting Act answers it with a closed list.
The list is closed
Section 1681b(a) of the FCRA opens with an unusual phrase. A consumer reporting agency may furnish a report “under the following circumstances and no other.” What follows is a set of permissible purposes, and if none of them fits, the pull was not allowed.
The ones that come up most often:
- You said so. Section 1681b(a)(2) permits a report furnished “[i]n accordance with the written instructions of the consumer to whom it relates.”
- A credit transaction involving you. Section 1681b(a)(3)(A) covers a person who “intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer.”
- A legitimate business need. Section 1681b(a)(3)(F) covers a person who “otherwise has a legitimate business need for the information — (i) in connection with a business transaction that is initiated by the consumer; or (ii) to review an account to determine whether the consumer continues to meet the terms of the account.”
Read (F)(i) carefully. The transaction has to be one you started. A company cannot manufacture a legitimate business need by deciding it would like to sell you something.
And the duty runs to the company doing the pulling, not only to the bureau. Section 1681b(f) says a person “shall not use or obtain a consumer report for any purpose unless (1) the consumer report is obtained for a purpose for which the consumer report is authorized to be furnished under this section; and (2) the purpose is certified in accordance with section 1681e of this title.” Both halves. Purpose and certification.
Hard inquiry, soft inquiry, and which one you are looking at
The CFPB draws the line this way. Hard inquiries “are often inquiries by lenders after you apply for credit to help them decide whether they will approve your loan or credit,” and they “can be seen on your report when others purchase your credit report from the credit reporting company.” Soft inquiries cover “reviews of existing accounts by lenders or insurance companies, prescreening inquiries by prospective lenders, employment screening of your credit reports, and your requests for your credit reports” — and, importantly, “[s]oft inquiries are shown only to you when you review your own credit report; they are not visible when others purchase your credit report.”
That last point is why this problem is usually discovered late. A great deal of looking happens on your file that other lenders never see. You see it only when you pull your own report.
How to find out who pulled it
You have a statutory right to be told. Two provisions, covering two different sets of inquiries.
Section 1681g(a)(3) covers the ones you are most likely asking about. A bureau must disclose the “[i]dentification of each person … that procured a consumer report — (i) for employment purposes, during the 2-year period preceding the date on which the request is made; or (ii) for any other purpose, during the 1-year period preceding the date on which the request is made.” And that identification “shall include … the name of the person” and, “upon request of the consumer, the address and telephone number of the person.”
Section 1681g(a)(5) covers the ones you did not trigger: “[a] record of all inquiries received by the agency during the 1-year period preceding the request that identified the consumer in connection with a credit or insurance transaction that was not initiated by the consumer.”
So ask for your file disclosure from each of the three nationwide bureaus, and then ask for the address and phone number of whoever is named. That is not a favor. It is the statute.
What it usually turns out to be
Before assuming the worst, it is worth knowing the common explanations, because several of them are lawful.
An account review. A card issuer you already do business with looking at your file. Permitted under § 1681b(a)(3)(F)(ii) — and normally a soft inquiry.
A dealership shopping your application. You signed one credit application at a car dealer and it went to eight lenders. Each pull is separate, and whether each was authorized depends on what you signed.
A company you have never heard of that is a company you have heard of. Card issuers, servicers and dealer-finance arms trade under names that appear on a report and nowhere else. Our page on Factual Data is one example of that pattern.
Identity theft. Somebody applied for credit using your information, and the inquiry is the footprint. If that is what happened, the inquiry is the smallest part of the problem — see identity theft and your credit report.
Nothing lawful at all. A pull with no permissible purpose behind it. That is the case this post is about.
What a claim looks like
The FCRA treats careless and deliberate violations differently, and there is one wrinkle here worth stating precisely, because it is commonly reported wrong.
For a negligent violation, § 1681o(a) gives you actual damages plus costs and reasonable attorney’s fees. No statutory damages.
For a willful violation, § 1681n(a)(1)(A) gives you “any actual damages sustained by the consumer as a result of the failure or damages of not less than $100 and not more than $1,000,” plus punitive damages as the court may allow, plus costs and fees.
Section 1681n(a)(1)(B) then adds a higher floor — “actual damages … or $1,000, whichever is greater” — but only “in the case of liability of a natural person for obtaining a consumer report under false pretenses or knowingly without a permissible purpose.” That $1,000 floor is aimed at an individual who pulled your report, not at a company. Against a corporate defendant, the range in (a)(1)(A) is what applies.
The deadline matters as much as the theory. Under § 1681p, suit must be brought “not later than the earlier of (1) 2 years after the date of discovery by the plaintiff of the violation … or (2) 5 years after the date on which the violation … occurs.” The five-year figure is an outer limit, not an option — the two-year clock from discovery is the one that usually governs.
What to do
- Pull all three reports and write down every inquiry you do not recognize, with its date.
- Ask each bureau for the identification it owes you under § 1681g(a)(3), including address and phone number.
- Write to the company that pulled it and ask what permissible purpose it claims and what it relies on for your authorization. Keep the answer.
- Dispute the entry with the bureau if the company cannot support the pull. Our page on what a lawyer does when a dispute fails covers what comes next.
- Do not wait. Two years from discovery goes quickly.
Talk to us
If a company pulled your credit report and cannot say why it was allowed to, send us the report showing the inquiry and anything the company has told you. We will look at it and tell you whether there is a claim. You pay nothing unless we win.
We bring claims under the Fair Credit Reporting Act nationwide. See credit reporting errors for the wider picture, or FCRA lawsuit for how a case proceeds.
Admitted in Pennsylvania and New Jersey; available to appear pro hac vice in other federal courts.
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