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Financial Education

Beware of Credit Repair Scams

If you see ads or receive an an offers to repair or fix your credit, it could be a scam. Here's what you need to know about credit repair scams.

Warning signs of a credit repair scams

  • Demanding up front payment or fees. Pressure to pay in advance can be signs of a scam. Under the federal Credit Repair Organizations Act, credit repair companies can’t request or receive payment until they’ve completed the services they’ve promised.
  • Promises to remove negative information from your credit report. The company tells you it can get rid of negative credit information, even if that information is accurate and current. No one can do this.
  • Encouraging you to dispute everything on your credit report. The company advises you to dispute all the information in your credit report, even if it is correct and timely.
  • Refuses or avoids explaining your rights to you. The company doesn’t tell you your rights and what you can do for yourself for free. Disputing errors in your credit reports is a free legal right available to you under the Fair Credit Reporting Act. You don’t need to pay a credit repair organization to do it for you. Also, if you have just signed up for a credit repair service, you have the right to cancel your contract with the company for any reason within three business days at no charge to you.
  • Tells you to not contact credit reporting companies. The company recommends that you don’t contact any of the nationwide credit reporting companies directly.

How can you legitimately repair your credit?

There are various ways you can improve your credit yourself over time.

  • Paying your bills and loans on time
  • Not getting too close to your credit limit
  • Making sure your credit report doesn’t have errors. And disputing them if there are.

Finding help

  • Contact a non-profit consumer credit counseling service in your community. Counselors can help you set a realistic budget and set up repayment plans with your creditors. Find an accredited counselor near you by contacting the National Foundation for Credit Counseling(link is external) at 1-800-388-2227.

How to Report Credit Repair Fraud