Getting specific derogatory items removed from your credit report is an essential part of credit repair and improving your personal credit score. There are four different ways to approach this successfully, and any good credit repair company will likely pursue as many of them as necessary (and even concurrently) to get your desired results.
1. Submit a Dispute to the Big Three Credit Bureaus
Your credit repair company will likely start by leveraging the Fair Credit Reporting Act. This Federal law details the kinds of information that the credit bureaus can list on your report and for what amount of time (typically seven years). Because of the stipulation in the FCRA that you possess the rights to a credit report that is accurate, credit repair companies will file disputes on any errors with the appropriate credit bureaus first.
2. Dispute with the Original Creditor who Reported the Remark to the Credit Bureaus
A good credit repair company will likely simultaneously work a second approach to having the items removed from your credit report by going around the credit bureaus to directly address the creditor regarding the error on your report. This could be a debt collector, bank, or credit card issuer who they are contacting.
They will send out a physical letter that forces the creditor or lender to begin an investigation as a credit bureau would. It will require that they verify the debt with original documentation. If they can not substantiate it, then it will have to be removed from your credit report altogether.
3. Dispatch a Pay for Delete Compromise to Your Creditor
The credit repair companies have several other tricks up their sleeves if the derogatory information is both correct and can be verified as a legitimate debt. They know that the credit bureaus will never take off such information even when it is disputed (once their investigation affirms the debt and its accuracy). So they will go to the original creditor and make them a negotiating offer that is hard to refuse.
Pay for delete simply means that the creditor will allow you to pay off your delinquent account in exchange for having all negative remarks regarding the account itself deleted from your credit files. There are creditors who will be only too happy to accept such an offer, which really costs them nothing but a few minutes of their time and gets them paid back in full.
4. Pursue a Goodwill Request for Deletion
If you are not much behind on an account, or if you have already paid off the debt, then you have given up your negotiating power for the credit repair company to offer the Pay for Delete. Instead, they can appeal to the mercy of the creditor in a request for goodwill deletion.
Here is how this works in practice:
The credit repair company will write a professional and heartfelt letter to your original creditor explaining the reasons that you were behind on the account and reminding them that you were generally a timely paying customer. They will request as a gesture of goodwill that the creditor adjust the reports on the account to be more favorable.
Creditors are not required to do this, and some will outright refuse. But then again, it costs nothing but some time and letters to make such a request. Another advantage to working with credit repair companies is that they will be able to speak to the right people at the lender who can make such a positive decision on your behalf.