How unwanted card, hard inquiry impact credit scores

Opening Credits columnist Eric Sandberg
Erica Sandberg is a prominent personal finance authority and author of "Expecting Money: The Essential Financial Plan for New and Growing Families." She writes "Opening Credits," a weekly reader Q&A column about issues for people who are new to credit, for

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Question Dear Opening Credits,
I went to a store and gave them information to do a soft inquiry for their financing option. A week later I got a credit card in the mail, and I didn't make the purchase or sign any authorization for a card. What should I do now? I never wanted the card, and I'm worried it will hurt my credit to keep it or close it. – Lana


Dear Lana,
I’m afraid that you asked the employee to do the impossible. For the retailer to determine if you would qualify for their financing option, it would need to conduct a thorough credit check, which would include taking look at your credit history in depth. When it does so, a hard inquiry is placed on your consumer credit reports. 

Because the inquiry is listed, it will be considered in your credit scores for one year and removed from your credit report in two years. Unless there is very little activity on your reports, though, this notification should not have a huge impact on your scores. Hard inquiries only comprise 10 percent of a FICO calculation, and is low on the totem pole for the VantageScore, too.

What has a much stronger impact on your scores is the new credit card itself. You may not have asked for it or even wanted it, but the account is now part of your credit profile. But won’t it hurt your scores? No. In fact, it might even help them. If you have any revolving debt that is listed on your reports, the added credit line will reduce your credit utilization ratio. Credit utilization is a major consideration for both scoring systems, so your numbers might have experienced a positive jolt when the account was granted.

Now, I’m not implying you ought to keep this credit card. If you don’t want it, close it. However, because there was a mistake, try to have it removed. Call the credit department for the store and let them know that you never intended on applying for the card, and want them to scrub all traces of information about it, from the hard inquiry to the credit line, from your credit reports. With enough pressure, you could gain resolution.

If you don’t get the desired result, dispute the matter to the credit reporting agencies. Write an explanation of what happened and be clear that you want the inquiry and evidence that the account was ever granted purged from your file. Mail it to the dispute department of TransUnion, Experian or Equifax (not all three, choose one as it will notify the others) as well as a copy to the store. Use the post office’s “return receipt” mailing option so you can be sure it lands in someone’s hands. Once received, the credit reporting agency will conduct a 30-day investigation, and it may be removed from your reports if it finds in your favor.

In the event that you’re unsuccessful, you can either keep disputing or just cancel the card anyway. Over time, the entire affair should have little to no negative scoring affect. Just use the accounts you do have responsibly and this situation will be little more than an aggravating memory. If you plan on financing a large purchase in the near future, such as a car loan or mortgage, then hold off on closing the card until you’re done. That way you can protect against any unnecessary credit score dips that could affect your loan interest rate.

Regarding soft pulls, these types of inquiries are generated when a lender or other business checks your history without you instigating it. It’s for marketing purposes, to see who might be right for one of their products. It is not factored into your credit scores at all. But trust me, if you ask a business, whether it’s a store or a bank, to see if you are eligible for a loan or a credit card, it will dive in to review your history in detail and a hard inquiry will land on your reports.

See related: How to cancel a credit card, Top 10 credit bureau myths

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Updated: 10-23-2018