What we verified in “Credit repair scams: warning signs and your rights”

Statements and where we checked them

The statements with rules, figures or dates, with the exact place in the source and the date we checked them.

1. According to the CFPB, credit repair companies promise to fix your credit or improve your scores, typically by doing things you can do yourself for free; they often use advertising and social media; they usually note negative items on your report and send disputes to the credit reporting companies; if a reporting company decides a dispute is frivolous, it does not have to investigate, which can happen with multiple or formulaic requests; you should dispute only inaccurate information, but these companies typically dispute accurate items too, which can make accurate items disappear temporarily and reappear once verified, so your scores could change and then change back; accurate negative information such as collections, charge-offs, judgments and late payments stays on the report for seven years from the last activity or first delinquency date; there are no shortcuts to a strong credit history; reporting companies remove inaccurate, incomplete or unverifiable items whether you or a credit repair company disputes them; you can dispute mistakes yourself for free; credit repair companies cannot legally get accurate and timely information removed; and many charge a monthly fee justified by disputing the same items over and over.

   Sources 1 · What is the difference between credit counseling and debt settlement, debt consolidation, or credit repair? (last reviewed May 15, 2024), 'Credit repair': 'Credit repair companies make promises to fix your credit or improve your scores, typically by doing things you can do yourself for free'; 'They often use advertising and social media promotions'; 'If the reporting company decides that the dispute is “frivolous,” it does not have to investigate'; 'The only time you should dispute information is when it’s inaccurate'; 'After the item is verified, it reappears on your credit report'; 'Your credit scores could change—and then change back—because of these actions'; 'remain on the credit report for seven years from the last activity or first delinquency date'; 'there are no shortcuts to achieving a strong credit history or high credit scores'; 'whether the negative items are disputed by you or a credit repair company'; 'You can dispute mistakes in your credit reports yourself, for free'; 'credit repair companies cannot legally get information removed if it is accurate and timely'; 'Often charges a monthly fee, which they justify by disputing the same negative items on your credit reports over and over' · Checked October 17, 2026

2. According to the CFPB, many credit repair companies sell by telemarketing; by law, a company that signed you up that way may not bill you or receive payment until the timeframe it promised for its services has ended and it has sent you a credit report showing the promised results, created six months after the results were achieved; so it cannot charge an upfront fee or an ongoing monthly fee, and sometimes it calls the charge a 'subscription fee' instead.

   Sources 1 · What is the difference between credit counseling and debt settlement, debt consolidation, or credit repair?, 'Beware of monthly subscription fees': 'Many credit repair companies use telemarketing to sell their services'; 'is not allowed to send you a bill or receive payment until two things happen'; 'The timeframe ends when they told you they would provide you their services'; 'they cannot charge you an upfront fee or ongoing monthly service fee'; 'so sometimes the company calls it a “subscription fee” instead'; 'it must be created six months after the results were achieved' · Checked October 17, 2026

3. According to the CFPB, credit counseling organizations are usually nonprofits that advise you on managing your money and debts and usually offer free educational materials and workshops; they can set up a debt management plan in which you make a single payment to the organization and it pays your creditors; they cannot erase your debts; they are permitted to charge fees; they work to lower your overall monthly payment rather than reduce what you owe; and they never advise you to stop paying your debts.

   Sources 1 · What is the difference between credit counseling and debt settlement, debt consolidation, or credit repair?, 'Credit counseling': 'Credit counseling organizations are usually nonprofit organizations that advise you on managing your money and debts'; 'They usually offer free educational materials and workshops'; 'They can’t erase your debts'; 'you make a single payment to the credit counseling organization each month or pay period'; 'Credit counseling organizations are permitted to charge you fees for their services'; 'Works to lower your overall monthly payment'; 'Never advises you to stop paying your debt' · Checked October 17, 2026

4. According to the CFPB, a debt consolidation loan is money you borrow to repay your separate loans and pay back one amount; a low rate may be a teaser rate that lasts only a limited time, after which your payments could go up; a lower monthly payment may be because you are paying over a longer time; and counting the term, fees and costs, you might pay more overall.

   Sources 1 · What is the difference between credit counseling and debt settlement, debt consolidation, or credit repair?, 'Debt consolidation lenders': 'A debt consolidation loan is money you borrow to repay all your separate loans and pay back just one amount'; 'a low interest rate could be a “teaser rate” that applies only for a limited time'; 'After the teaser rate expires, your payments could go up'; 'it could be because you’re paying over a longer time'; 'overall you might pay more for the convenience of a consolidated loan' · Checked October 17, 2026

5. According to the CFPB, a debt settlement company could be breaking the law if it charges you a fee before three things happen: it has renegotiated, settled, reduced or changed the terms of at least one of your debts; you agree to the settlement with your creditor or collector; and you have made at least one payment to the creditor or collector under that agreement; money you save in an account for a settlement still belongs to you, the account must be administered by an independent third party and you can withdraw the funds at any time without penalty; and if part of a debt is forgiven, you could owe taxes on the forgiven amount.

   Sources 1 · What is the difference between credit counseling and debt settlement, debt consolidation, or credit repair?, 'Debt settlement': 'money you save up in an account for use by a debt settlement company still belongs to you'; 'must be administered by an independent third party'; 'You are entitled to withdraw funds held in that account at any time without penalty'; 'A debt settlement company could be breaking laws if they charge you a fee before three things happen'; 'at least one of your debts'; 'You must agree to the settlement agreement'; 'You must have made at least one payment to the creditor or debt collector'; 'which could mean you owe taxes on the amount forgiven' · Checked October 17, 2026

6. According to the CFPB, dealing with debt relief or settlement companies can be risky: they often charge expensive fees and encourage you to stop paying your credit cards, which adds late fees and penalty interest and can lead to lawsuits; many cannot settle all your debts; settlement may leave you deeper in debt than when you started and can hurt your credit scores; avoid any company that charges fees before settling your debts, promises a set percentage reduction, touts a 'new government program' for credit card debt, guarantees your debt will go away, tells you to stop communicating with your creditors or says it can stop all collection calls and lawsuits; and an alternative is a non-profit consumer credit counseling service, which can help with an affordable debt management plan and a budget.

   Sources 2 · What is a debt relief program and how do I know if I should use one? (last reviewed August 28, 2023): 'Dealing with these companies can be risky'; 'Debt settlement companies often charge expensive fees'; 'Debt settlement companies typically encourage you to stop paying your credit card bills'; 'In many cases, the debt settlement company will be unable to settle all of your debts'; 'Debt settlement may well leave you deeper in debt than you were when you started'; 'Charges any fees before it settles your debts'; 'Represents that it can settle all of your debt for a promised percentage reduction'; 'new government program'; 'Guarantees it can make your debt go away'; 'Tells you to stop communicating with your creditors'; 'Tells you it can stop all debt collection calls and lawsuits'; 'An alternative to a debt settlement company is a non-profit consumer credit counseling service' · Checked October 17, 2026

7. According to the CFPB, warning signs of a credit repair scam include a company that pressures you to pay upfront fees (the simple rule is not to pay upfront); promises to remove negative information from your credit report even if it is accurate and current, which no one can do; asks you to dispute all of your credit report even if it is correct; refuses or avoids explaining your rights and what you can do for free; or tells you not to contact the credit reporting companies; as well as one that guarantees a specific increase in your credit score.

   Sources 3 · How can I tell a credit repair scam from a reputable credit counselor? (last reviewed November 7, 2023): 'Warning signs for credit repair scams include companies that ask you to pay before providing services'; 'it can guarantee a specific increase in your credit score'; 'Pressures you to pay up-front fees'; 'Don’t pay upfront'; 'Promises to remove negative information from your credit report'; 'No one can do this'; 'Requests you dispute accurate information in your credit report'; 'Refuses or avoids explaining your rights to you'; 'Tells you to not contact credit reporting companies' · Checked October 17, 2026

8. According to the CFPB, under the federal Credit Repair Organizations Act (CROA), credit repair companies cannot request or receive payment until they have completed the services they promised; some structure monthly payment plans to avoid this requirement, but all forms of upfront payment before services are completed are illegal; disputing errors on your credit reports is a free legal right under the Fair Credit Reporting Act and you do not need to pay anyone to do it; if you just signed up, you can cancel for any reason within three business days at no charge; if a company violates the telemarketing rule, you may have a right to sue; and if you have trouble with your credit reports, you can submit a complaint to the CFPB.

   Sources 3 · How can I tell a credit repair scam from a reputable credit counselor?: 'credit repair companies can’t request or receive payment until they’ve completed the services they’ve promised'; 'Some companies will structure monthly payment plans to try to avoid this requirement'; 'all forms of upfront payment before services are completed are illegal'; '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'; 'within three business days at no charge to you'; 'If a credit repair organization violates this law, you may have a right to sue'; 'you can submit a complaint with the CFPB' · Checked October 17, 2026

9. According to the CFPB, most credit counselors offer services in local offices, online or by phone; to get started it points to the Financial Counseling Association of America or the National Foundation for Credit Counseling, and the U.S. Department of Justice publishes a list of approved credit counselors; you can check with your state attorney general and state consumer protection agency that they are reputable; a reputable organization sends free information about its services without asking for details about your situation; get a specific fee quote in writing, do not sign anything without reading it, treat it as a red flag if employees are paid more when you sign up for certain services or pay a fee, and look elsewhere if an organization will not help you because you cannot pay; and if you choose a debt management plan, confirm with your creditors that they accepted it before sending any payments.

   Sources 4 · What is credit counseling? (last reviewed August 2, 2023): 'Most credit counselors offer services through in-person meetings at local offices, online, or on the telephone'; 'Financial Counseling Association of America'; 'National Foundation for Credit Counseling'; 'a list of approved credit counselors through the U.S. Department of Justice'; 'you can check with your state attorney general and state consumer protection agency to make sure they’re reputable'; 'should be willing to send you free information about its services without requiring you to provide details about your situation'; 'Get a specific price quote in writing'; 'Don't sign anything without reading it first'; 'If an organization won't help you because you can't afford to pay, look elsewhere'; 'If the answer is yes, consider this a red flag and go elsewhere'; 'contact your creditors and confirm that they have accepted the proposed plan before you send any payments' · Checked October 17, 2026

10. Under the Credit Repair Organizations Act (CROA), a credit repair organization is anyone who sells, provides or performs, in return for money, a service meant to improve a consumer's credit record, history or rating, or to advise the consumer about that; it does not include nonprofit organizations exempt from taxes under section 501(c)(3), a creditor helping you restructure a debt you owe it, or banks and credit unions.

    Sources 5 · 15 U.S.C. §1679a(3): 'in return for the payment of money or other valuable consideration'; 'improving any consumer’s credit record, credit history, or credit rating'; 'any nonprofit organization which is exempt from taxation under section 501(c)(3)'; 'to the extent the creditor is assisting the consumer to restructure any debt owed by the consumer to the creditor'; 'any depository institution'; 'Federal or State credit union' · Checked October 17, 2026

11. Under the CROA, no one may make, or advise you to make, an untrue or misleading statement about your credit to a credit reporting agency or a creditor; advise you to make a statement intended to alter your identification so your credit record does not show, in order to hide accurate and current negative information; misrepresent its services; or commit fraud in selling them.

    Sources 6 · 15 U.S.C. §1679b(a)(1)–(4): 'make any statement, or counsel or advise any consumer to make any statement, which is untrue or misleading'; 'the intended effect of which is to alter the consumer’s identification to prevent the display of the consumer’s credit record, history, or rating for the purpose of concealing adverse information that is accurate and not obsolete'; 'make or use any untrue or misleading representation of the services of the credit repair organization'; 'a fraud or deception on any person in connection with the offer or sale of the services' · Checked October 17, 2026

12. Under the CROA, no credit repair organization may charge or receive money or anything else of value for a service it agreed to perform before that service is fully performed.

    Sources 6 · 15 U.S.C. §1679b(b), Payment in advance: 'No credit repair organization may charge or receive any money or other valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is fully performed' · Checked October 17, 2026

13. Under the CROA, before you sign any contract the organization must give you the written statement 'Consumer Credit File Rights Under State and Federal Law', which says, among other things, that you have a right to dispute inaccurate information directly with the credit bureau; that neither you nor any 'credit repair' company has the right to have accurate, current and verifiable information removed; that you have a right to sue an organization that violates the law; that you can cancel your contract for any reason within 3 business days of signing it; and that you can, on your own, notify the credit bureau in writing that you dispute an item, and the bureau must reinvestigate without charging you.

    Sources 7 · 15 U.S.C. §1679c(a): 'before any contract or agreement between the consumer and the credit repair organization is executed'; 'Consumer Credit File Rights Under State and Federal Law'; 'You have a right to dispute inaccurate information in your credit report by contacting the credit bureau directly'; 'has the right to have accurate, current, and verifiable information removed from your credit report'; 'You have a right to sue a credit repair organization that violates the Credit Repair Organization Act'; 'for any reason within 3 business days from the date you signed it'; 'The credit bureau may not charge any fee for this service' · Checked October 17, 2026

14. Under the CROA, the organization may not provide any services without a written and dated contract signed by you, or before the end of the 3-business-day period starting when you sign; the contract must state in writing the total of all payments, a full and detailed description of the services, including all guarantees and the estimated date or time needed to finish, the organization's name and principal business address, and, in bold next to your signature, that you may cancel without penalty or obligation before midnight of the third business day after signing.

    Sources 8 · 15 U.S.C. §1679d(a)–(b): 'unless a written and dated contract'; 'before the end of the 3-business-day period beginning on the date the contract is signed'; 'the total amount of all payments to be made by the consumer'; 'a full and detailed description of the services to be performed'; 'all guarantees of performance'; 'the credit repair organization’s name and principal business address'; 'You may cancel this contract without penalty or obligation at any time before midnight of the 3rd business day after the date on which you signed the contract' · Checked October 17, 2026

15. Under the CROA, you may cancel any contract with a credit repair organization without penalty or obligation by notifying it before midnight of the third business day after signing; the contract must come with a form, in duplicate, headed 'Notice of Cancellation', which you mail or deliver signed and dated, or you can send any other written notice; and you must be given a copy of the completed contract, the rights statement and any other document you are asked to sign, at the time you sign it.

    Sources 9 · 15 U.S.C. §1679e(a)–(c): 'Any consumer may cancel any contract with any credit repair organization without penalty or obligation'; 'at any time before midnight of the 3rd business day'; 'Each contract shall be accompanied by a form, in duplicate, which has the heading “Notice of Cancellation”'; 'mail or deliver a signed, dated copy of this cancellation notice, or any other written notice'; 'a copy of the completed contract and the disclosure statement'; 'at the time the contract or the other document is signed' · Checked October 17, 2026

16. Under the CROA, any waiver you sign of your rights under this law is void and cannot be enforced; trying to get you to waive them is a violation; and a contract that does not comply with the law is void and cannot be enforced.

    Sources 10 · 15 U.S.C. §1679f(a)–(c): 'Any waiver by any consumer of any protection provided by or any right of the consumer under this subchapter'; 'shall be treated as void'; 'Any attempt by any person to obtain a waiver'; 'Any contract for services which does not comply with the applicable provisions of this subchapter' · Checked October 17, 2026

17. Under the CROA, anyone who fails to comply is liable to you for the greater of the actual damages you suffered or the amount you paid the organization, plus any punitive damages the court allows and, in a successful action, costs and reasonable attorneys' fees.

    Sources 11 · 15 U.S.C. §1679g(a): 'The greater of'; 'the amount of any actual damage sustained by such person as a result of such failure'; 'any amount paid by the person to the credit repair organization'; 'Punitive damages'; 'such additional amount as the court may allow'; 'together with reasonable attorneys’ fees' · Checked October 17, 2026

18. Under the CROA, a lawsuit to enforce the law may be brought within 5 years of the violation, or, if the organization materially and willfully misrepresented information it had to disclose, within 5 years of when you discover the misrepresentation.

    Sources 12 · 15 U.S.C. §1679i: 'the end of the 5-year period beginning on the date of the occurrence of the violation involved'; 'has materially and willfully misrepresented any information'; 'the end of the 5-year period beginning on the date of the discovery by the consumer of the misrepresentation' · Checked October 17, 2026

19. Under the Telemarketing Sales Rule (16 CFR §310.4), a telemarketer selling services to remove negative information from, or improve, your credit history or rating may not request or receive payment until the time frame it promised for all the services has passed and it has given you a credit report from a consumer reporting agency showing the promised results were achieved, issued more than six months after they were achieved.

    Sources 13 · 16 CFR §310.4(a)(2): 'represented to remove derogatory information from, or improve, a person's credit history, credit record, or credit rating until'; 'The time frame in which the seller has represented all of the goods or services will be provided to that person has expired'; 'documentation in the form of a consumer report from a consumer reporting agency demonstrating that the promised results have been achieved, such report having been issued more than six months after the results were achieved' · Checked October 17, 2026

20. According to the CFPB, you can get a free copy of your credit report from each of the three major credit reporting companies (Equifax, Experian and TransUnion) once a week at AnnualCreditReport.com, or by calling (877) 322-8228; it warns to be cautious of websites claiming to offer free reports, because some only give one if you buy other products or bill you for services you have to cancel.

    Sources 14 · How do I get a free copy of my credit reports? (last reviewed October 15, 2026): 'once a week at AnnualCreditReport.com'; 'Be cautious of websites that claim to offer free credit reports'; 'Some of these websites will only give you a free report if you buy other products or services'; 'Other websites give you a free report and then bill you for services you have to cancel'; 'go to AnnualCreditReport.com or call (877) 322-8228' · Checked October 17, 2026

21. HUD-approved housing counselors give independent advice on buying a home, renting, defaults and credit issues, often at little or no cost.

    Sources 15 · Find a Housing Counselor: 'Housing counselors throughout the country can provide advice on buying a home, renting, defaults, forbearances, foreclosures, and credit issues'; 'they can offer independent advice, often at little or no cost to you' · Checked October 17, 2026