Norman hit the nail on the head regarding who does the exclusion vs deletion.
A bit more explanation relating to exclusion vs deletion....
You can always request a creditor or debt collector ("furnisher") to delete their reported information. If they agree, then they report actual deletion of the information from your credit file. It is gone.
The primary issue with deletion by a furnisher is that it is not in favor with the CRAs. The credit reporting agencies are in the business of selling credit reports and scores, and the more complete their data, the more valuable is their product. For business reasons, they thus do not want furnishers to delete otherwise accurate information, such as voluntary deletion based on payment of the debt. Their standard credit reporting manual instructs furnishers not to delete based on payment of the debt.
That policy is incorporated into their credit reporting agreements, and violation of that policy could possibly result in termination of a credit reporting agreement.
Early exclusion, as stated by Norman, is determined by the CRA, with no involvement of the furnisher.
FCRA 605(a) imposes mandatory periods after which a CRA is required to discontinue inclusion of adverse items of information in credit reports they issue.
Exclusion does not actually delete the information from the consumer's credit file. It simply prevents the CRAs from including the adverse item in normal credit reports they issue.
HOWEVER, credit report exclusion is NOT absolute. FCRA 605(b) provides limited situations where the credit report exclusion periods/provisions of section 605(a) are exempted. The most common example is when a creditor requests a credit report relating to a consumer-initiated request for credit in an amount of $150K or more.
If the creditor requests a credit report that shows all prior derogs, then the CRA can include any and all derogs in a special "full factual" credit report, meaning the normal credit report exclusion provisions do not apply.
In the case of a good-will deletion reported by a furnisher, the info is gone, and thus cannot thereafter be included in any credit report.
The credit report exclusion provisions of section 605(a) only set periods after which a CRA is prevented from including adverse items in normal credit reports.
The CRA is not precluded from excluding at an earlier date. They commonly grant their own early exclusion without any request of consumers for collections and charge-offs. FCRA 605(a)(4) as modified by section 605(c) sets a max exclusion period of no later than 7 years plus 180 days from the DOFD. However, the CRAs routinely grant exclusion at approx 7 years.
The CRAs also grant routine exclusion of judgments after 7 years from date of entry, even if unpaid. FCRA 605(a)(2) only requires exclusion of an unpaid judgment after 7 years if the judgment is no longer enforceable. The CRAs dont usually determine whether a judgment remains enfoceable, and thus grant exclusion based only on period from date of entry of the judgment.
Grant of early exclusions that are substantially earlier than the statutory period deviate from the "intent" of congress, and are normally limited by the CRAs to less than 6 months, similar to the early exclusion of 6 months granted on collections and charge-offs.
