Protect Yourself from Credit Repair Scams

Every day, companies promise consumers who have poor credit histories that, for a fee, they will clean up their credit report so they can get a car loan, a home mortgage, insurance or even a job. The truth is, these companies cannot deliver an improved credit report using the tactics they promote. It’s illegal to remove accurate, negative information from your credit report. So after you pay them hundreds or thousands of dollars in up-front fees, you are left with the same credit report and a lot less money.

Attorneys at the Federal Trade Commission (FTC) say they have never seen a legitimate credit repair operation. The fact is, there is no quick fix for bad credit. The only legitimate credit repair starts with you – and it takes time and a conscious effort to pay your debts.

Recognizing a Credit Repair Scam

If you see a credit repair offer, here’s how to tell if the company behind it is up to no good:

  • The company wants you to pay for credit repair services before they provide any services. Under the Credit Repair Organizations Act, credit repair companies cannot require you to pay until they have completed their promised services.
  • The company does not tell you your rights and what you can do yourself for free.
  • The company recommends that you do not contact any of the three major national credit reporting companies directly.
  • The company tells you they can get rid of most or all of the negative credit information in your credit report, even if that information is accurate and current.
  • The company suggests that you try to invent a “new” credit identity – and then a new credit report – by applying for an Employer Identification Number to use instead of your Social Security number.
  • The company advises you to dispute all the information in your credit report, regardless of its accuracy or timeliness.

To file a complaint or to get free information on consumer issues, visit or call toll-free 877- FTC-HELP.