How can I recognize a credit repair scam?

Answer: Warning signs for credit repair scams include companies that ask you to pay before providing services. The company may tell you it can guarantee a specific raise in your credit score or get rid of negative credit information in your credit report, even though the information is accurate and current.

If you see ads or receive offers to repair or fix your credit, look for these warning signs:

  • The company wants you to pay before it provides any services. Under the Credit Repair Organizations Act, 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 avoid this requirement, and you should know that no form of upfront payment is legal. A simple rule to follow is “Don’t pay upfront.” If the company uses telemarketing such that the Telemarketing Sales Rule applies, the company may not request or receive fees until it has provided you with a credit report generated more than six months after the promised results that shows the results. The company doesn’t tell you your rights and what you can do for yourself for free.
  • The company recommends that you don’t contact any of the nationwide credit reporting companies directly.
  • The company tells you it can get rid of the negative credit information in your credit report, even if that information is accurate and current. No one can do this.
  • The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.


It is a federal crime to misrepresent your Social Security number or to obtain an Employer Identification Number from the Internal Revenue Service under false pretenses.Tip:


If you have just signed up for these services, you have the right to cancel your contract with any credit repair organization for any reason within three business days.

These companies must follow numerous federal laws, including the Credit Repair Organizations Act and often the Telemarketing Sales Rule, both of which forbid credit repair organizations from using deceptive practices and from accepting up-front fees. These laws prohibit many deceptive practices by credit repair organizations. You have a right to sue a credit repair organization using these laws. 


If you have a problem with credit reporting, you can submit a complaint with the CFPB online. You can also submit a dispute letter to either a furnishing company or a credit reporting company via one of our templates. 

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