Yes you can do it, but it takes some work on your part and a little credit bureau ignorance helps too.
Often times a short sale might report on the Credit Bureau as a Foreclosure Initiated, because the borrower likely went more than 90 days delinquent on the mortgage account. The Credit Scoring system, FICO, is a computer algorithm that takes many things into consideration when providing a credit score, however, the Credit Bureaus are like any other company and must adhere to legal guidelines outlined in the Fair Credit Reporting Act.
If a consumer disputes ANY item on their credit report IN WRITING, the Credit Bureau must obtain a verification of this dispute with the Original Creditor in question, however, if the Original Creditor does not REPLY to the Consumer Dispute within 30 DAYS then the Credit Bureau is required BY LAW to remove the item from the consumer credit report. THIS IS HUGE.
Often times, these creditors simply don’t have the manpower to verify the information to the Credit Bureaus, so if the sheer volume of credit disputes is so high, as it often is, then a consumer may luck out and not face any verification challenges from the original creditor. Results = foreclosure deleted.
Using the Court system is also a new strategy many consumers are beginning to utilize. Filing a lawsuit in State or Federal Court is a tactic employed in getting Credit Bureaus to properly report or simply remove the damaging language on the credit file. Often times if a consumer is diligent in their quest, a credit bureau will just remove the language to get rid of the nussance. Consumers can file their own lawsuits without the help of an attorney, this is called being a Pro Se litigant, but requires a lot of homework and knowledge of local rules of the Civil Courts.
Recap of removing a Foreclosure/Short Sale from a Credit Report:
1. Dispute the item on all 3 Credit Bureaus IN WRITING
2. Keep disputing and make sure to track all correspondence
3. If after 30 days there is no answer from Creditor – demand its removal
3. File a Lawsuit against the Credit Bureau for wrongfully reporting the account.
4. Stay diligent in your effort, eventually, the creditor will fold from sheer exhaustion.