Credit repair companies charge to do what you can do yourself for free: get your credit reports and dispute mistakes. Federal law, the Credit Repair Organizations Act (CROA), bans them from charging before the work is done and from promising to remove accurate negative information, and gives you 3 business days to cancel (FTC). Use the check below on any offer, then fix errors free with the steps on this page.
Federal law and FTC/CFPB guidance · checked Oct. 25, 2026
Tick anything the company said or did. The first ten are federal rules; the last three are warning signs the FTC and CFPB list.
Facts from the statute and FTC/CFPB pages, not legal advice. Whether a company broke the law is for the FTC, your state attorney general or a court to decide.
| Rule | What it means for you |
|---|---|
| No payment up front | A credit repair company can't charge or take money for any service before that service is fully done (15 U.S.C. 1679b(b)). The CFPB says monthly plans that bill before the work is finished are still illegal up-front fees. |
| Sold by phone: stricter | If it was sold by telemarketing, the FTC's Telemarketing Sales Rule bans any fee until the promised time frame is over and you've been given a credit report, issued more than 6 months after the results, that shows them (16 CFR 310.4(a)(2)). |
| Written, dated contract | It must list the total of all payments, a full description of the services and any guarantees, an estimate of how long it will take, and the company's name and principal business address, with a bold cancel notice next to your signature (1679d). |
| Your rights statement first | Before you sign, it must hand you a separate statement titled “Consumer Credit File Rights Under State and Federal Law” and keep your signed copy for 2 years (1679c). |
| 3 business days to cancel | You can cancel for any reason, without penalty, before midnight of the 3rd business day after signing. The contract must come with a “Notice of Cancellation” form in duplicate, and the company can't start work during those 3 business days (1679d(a)(2), 1679e). |
| No lies, no new identities | No untrue or misleading claims about its services, no advising you to make untrue statements to credit bureaus or lenders, and no helping you change your identity to hide accurate information (1679b(a)). The FTC says using an EIN or another number instead of your own SSN to get credit can mean fines or prison. |
| You can't sign rights away | Any waiver of your rights is void, asking for one is itself a violation, and a contract that breaks the law is void and can't be enforced (1679f). |
| You can sue | A company that breaks the law owes the greater of your actual damages or everything you paid, plus punitive damages a court allows and costs and attorney's fees if you win (1679g). You have 5 years from the violation, or from when you discover a willful misrepresentation (1679i). The FTC and state attorneys general can also sue (1679h), and state credit repair laws still apply (1679j). |
Who isn't covered: the law's definition leaves out 501(c)(3) nonprofit organizations, a creditor helping you restructure a debt you owe it, and banks and credit unions (1679a(3)). A nonprofit credit counselor is a different service, but check it out with your state attorney general before you sign up (CFPB).
Sources: 15 U.S.C. 1679-1679j; 16 CFR 310.4(a)(2); CFPB; FTC.
Sources: FTC: Fixing Your Credit FAQs; FTC consumer alert, Jan. 7, 2026; 15 U.S.C. 1679c.
Paid with crypto, a wire transfer or a gift card? Act fast; the FTC says those are the hardest payments to get back. See how to dispute a charge or get a refund.
Sources: FTC: Fixing Your Credit FAQs; 15 U.S.C. 1679h; CFPB.
Facts, not legal advice. We republish federal law and FTC/CFPB guidance with dates. We don't rate or recommend credit repair companies, and there are no partner links on this page.
Yes, but federal law tightly limits it. Under the Credit Repair Organizations Act, a credit repair company can't charge you until it has fully done the work it promised, must give you a written contract and a separate statement of your rights, and must let you cancel within 3 business days. It can't lie about what it can do or tell you to lie.
No. The FTC says no one can legally remove information from your credit report that is accurate and current. Most negative information comes off after 7 years, and bankruptcy after 10. Errors can be disputed, and you can do that yourself for free.
You can cancel for any reason, without penalty, before midnight of the 3rd business day after you sign. The company must give you a Notice of Cancellation form; mail or deliver it signed and dated, or send any other written notice. Keep a copy.
If the company broke the Credit Repair Organizations Act (for example it charged before finishing the work), you can sue within 5 years for your actual damages or the full amount you paid, whichever is more, plus punitive damages a court allows and attorney's fees if you win. Report it at ReportFraud.ftc.gov and to your state attorney general.
Estimates, not financial advice. Taxes, insurance, PMI and fees vary by lender, county and city; confirm with your lender, dealer and state agency before acting.