Under the federal Credit Repair Organizations Act (CROA), a credit repair company may not charge you before the promised services are fully performed, must give you a written contract and a statement of your rights, and must let you cancel within three business days of signing. A promise to remove accurate information is a warning sign.
- No payment before services are performed.
- You can cancel within three business days.
- You can dispute errors yourself for free.
What CROA requires
- No advance fees: the company cannot receive payment before the services are fully performed.
- A written contract describing the services, total cost, timeline and any guarantees.
- A written statement of your rights, titled “Consumer Credit File Rights Under State and Federal Law”, before you sign.
- A three-business-day right to cancel without penalty.
- No untrue or misleading claims about what the company can do.
Warning signs
- Asking for payment up front.
- Guaranteeing removal of all negative items or a specific score.
- Telling you not to contact the bureaus yourself.
- Suggesting a “CPN”, EIN or other number to create a new credit identity.
- Asking you to call accurate accounts “not mine”.
What you can do yourself
You can get free reports and dispute errors directly with the bureaus at no cost. Some states also require credit repair companies to register or post a bond, so you can check with your state attorney general.
Frequently asked questions
What can a legitimate company actually do?
Review your reports in detail, prepare and follow up on disputes of inaccurate or unverifiable items, and help you plan. It cannot lawfully remove accurate, verifiable information.
Where do I report a company?
You can submit complaints to the CFPB, the FTC and your state attorney general.
Sources
- 15 U.S.C. § 1679b — CROA: prohibited practices
- 15 U.S.C. § 1679e — CROA: right to cancel
- CFPB — Submit a complaint
- FTC — ReportFraud.ftc.gov
This guide is general information, not legal advice. Laws and lender practices change; check the official sources above for current details.
Accurate, verifiable records may legally remain. We do not guarantee removal or any specific score. You may also dispute errors directly with the credit bureaus for free.
