how do credit repair companies remove negative items

How Do Credit Repair Companies Remove Negative Items From Your Credit Report?

Having negative items on your credit report can significantly lower your credit score, making it harder to get approved for loans, credit cards, and other financial products. While you can dispute errors on your own, hiring a credit repair company can help remove negative items faster. But how exactly do they do it?

As a credit expert with over 10 years of experience, I’ll explain the behind-the-scenes process credit repair companies use to remove negative items from credit reports.

Validate Items on Your Credit ReportThe first thing a credit repair company will do is pull your credit reports from the three major bureaus — Equifax Experian, and TransUnion. They review all accounts both open and closed, looking for any inaccurate or questionable items that could be disputed. This includes

• Late payments
• Charge-offs
• Collections
• Bankruptcies
• Foreclosures
• Tax liens
• Judgments
• Inquiries
• Accounts that don’t belong to you

Any legitimate negative item that is reporting accurately cannot be removed. The Fair Credit Reporting Act (FCRA) only allows for the removal of incorrect, outdated, or unverifiable information.

Dispute Process with Credit Bureaus
Once errors are identified, the credit repair company will begin the dispute process on your behalf. This involves submitting dispute letters to the relevant credit bureaus, providing evidence that the information is inaccurate.

The credit bureaus are legally required to investigate all disputes within 30 days. If they cannot verify the item during the investigation, it must be removed from your credit report. The credit bureau also must inform the source of the negative item (usually a creditor or debt collector) that the account is under dispute.

This is where credit repair companies have an advantage over consumers disputing on their own. They submit high volumes of disputes in credit bureau-specific formats, following up aggressively. Credit bureaus are more likely to miss response deadlines or conduct cursory investigations when overwhelmed with disputes.

If a credit bureau does not respond to a dispute within the required 30 days, the law states it must remove the negative item until it can be verified. This is the strategy many credit repair companies rely on. While removals may only be temporary, the goal is deleting as many negative items as possible to boost your score quickly.

Negotiate with Creditors
For legitimate negative items that credit bureaus will not remove, a credit repair company may negotiate with your creditors directly to help lessen the impact. Strategies include:

• Goodwill letters – Requesting the creditor remove late payments or other negatives out of “goodwill.”

• Pay-for-delete – Offering to pay off a collection account if the creditor agrees to remove it from your credit reports.

• Settlement offers – Negotiating a lump-sum payment that is lower than the full account balance to have the item marked “Paid” instead of “Unpaid.”

While these tactics can be effective, keep in mind that creditors are not required to accept any offer to remove accurate negative information from your credit reports. But an experienced credit repair company will have negotiation strategies to get negative items deleted.

How Long Does Credit Repair Take?
The amount of time it takes to remove negative credit report items depends on your individual circumstances. For example, if you only have a handful of inaccuracies dragging down your score, they may be deleted within 30-60 days.

However, if you have multiple late payments, collections, and other major derogatory marks, it can take several months to see significant improvement in your credit reports. This is because credit bureaus may only remove a few items at a time before verifying and adding them back.

In general, expect at least 3-6 months when working with an reputable credit repair company before seeing considerable results. Removing most or all negative items on your reports can take 6 months to a year. But the longer you commit to credit repair, the more deletions you will achieve over time.

Can a Credit Repair Company Remove Bankruptcies?
Credit repair companies cannot remove bankruptcies or any other accurate information. However, bankruptcy records should only remain on your credit report for 7-10 years.

An experienced credit repair firm can ensure your bankruptcy is removed as soon as legally allowed. They will also dispute any errors in your bankruptcy reporting, such as incorrect dates or account details, to minimize the damage to your credit.

Within the 7-10 year reporting period, the effect of a bankruptcy filing will lessen each year if you begin rebuilding credit. A credit repair company can help speed up the process through creditor negotiations and diligent disputes. But no company can legally remove a bankruptcy that is still within its reporting period.

DIY Credit Repair vs. Hiring a Company
You can remove negative items from your credit reports on your own without paying a credit repair company. But the process is tedious and time-consuming. Credit bureaus make it difficult for consumers to navigate dispute portals and often side with creditors and debt collectors without thorough investigations.

A reputable credit repair firm employs specialists who file high volumes of disputes in the proper legal formats. Their experience negotiating with creditors also gives them an advantage most consumers lack.

So while do-it-yourself credit repair is possible, the complexity involved means most people see better results from hiring a company. Just be sure to research any firm thoroughly before signing up. Results are never guaranteed.

Look for red flags like unrealistic claims of deleting all negative items or demands for payment before services. The best credit repair companies offer month-to-month services without upfront fees and are upfront about average time frames and limitations.

Is Credit Repair Worth It?
For those with limited time or confidence about managing disputes, hiring a trusted credit repair firm can be worthwhile. While you’ll need to be patient through several billing cycles, many consumers see significant score increases from credit repair services.

Just have realistic expectations about the types of negative items credit bureaus will remove, and watch out for scams. Legally, no one can remove 100% of negatives from credit reports – not even the best credit repair companies. But their expertise can still help improve your credit standing over time.

Bottom Line
Credit repair companies help remove negative items from your credit reports by identifying and challenging inaccurate, misleading, or unverifiable information. While legitimate derogatory marks cannot be permanently deleted, these firms employ credit dispute strategies and creditor negotiation tactics that consumers rarely achieve on their own. So if you need professional help disputing errors and improving your credit score, partnering with a reputable credit repair service may offer advantages over DIY credit repair. Just be sure to research companies thoroughly first and understand it takes time to see results. Consistent commitment to the credit repair process will maximize your removals and credit score increase over the long run.