Lesson · Facts first · Free
Credit-repair scams — the law that protects you and the red flags
Everything a credit-repair company can legally do, you can do free. Congress wrote that down — and some companies break it anyway.
The facts
- 01The Credit Repair Organizations Act (CROA, 15 U.S.C. §1679) makes it illegal for a repair company to charge you BEFORE completing the promised services, requires a written contract with a 3-business-day cancellation right, and bans false claims about what can be removed.
- 02Nobody — not for $500, not for $2,000 — can legally remove accurate, in-window information from your report. Companies claiming a "100% guarantee" or "we delete anything" are lying or violating CROA; usually both.
- 03The CPN con: "new credit identities," credit profile numbers, or "clean" EINs to apply under. Using one to obtain credit is federal fraud (false statements to a lender), not a loophole. People go to prison for this; the sellers vanish.
- 04The legitimate toolkit is free: disputes under FCRA §611 (30-day investigations), goodwill letters to furnishers, complaints to the CFPB and your state attorney general. A repair company charges hundreds of dollars for the same letters — you already have the free generator on this site.
- 05Report a repair scam at ReportFraud.ftc.gov, the CFPB (consumerfinance.gov/complaint), and your state attorney general. CROA gives you the right to sue — actual damages, statutory damages up to $1,000 per violation, plus attorney's fees (15 U.S.C. §1679g).
Sources
- FTC — Credit Repair: How to Help Yourself: https://consumer.ftc.gov/articles/credit-repair-how-help-yourself
- FTC — Credit Repair Organizations Act: https://www.ftc.gov/legal-library/browse/rules/credit-repair-organizations-act
- Cornell LII — 15 U.S.C. §1679 (CROA): https://www.law.cornell.edu/uscode/text/15/1679
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Disclaimer: Educational information only — not credit repair, legal, or financial advice. You can always dispute items yourself for free directly with the bureaus.