Do Credit Repair Companies Really Work?

Discover the truth about credit repair services and find out if credit repair companies work effectively to improve your credit score.

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Updated June 26, 2024
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Maintaining a healthy credit history is crucial if you ever want to borrow money to buy something like a new car or a new house. It could even impact your ability to rent an apartment, get a cell phone plan, or get your dream job. If your credit is in less-than-stellar shape, a call from a credit repair company promising to improve your credit may sound attractive. But do credit repair companies work?

Credit repair companies can help clear up errors on your credit reports, which may eventually help improve your credit. However, they don’t really do anything you can’t do yourself for free, so why hire one?

Let’s look at the pros and cons of credit repair companies and what you should beware of if you choose to work with one.

In this article

Key takeaways

  • Credit repair companies examine clients’ credit reports and dispute any inaccuracies.
  • These companies can’t directly remove negative accurate information from your credit report.
  • Most legitimate negative marks stay on your credit report for seven years. Bankruptcies remain for up to ten years.
  • You can access your credit reports and dispute errors yourself without hiring a credit repair company.

What are credit repair companies?

Credit repair companies are businesses you pay to help clean up your credit history and possibly improve your credit score. They do this by examining your credit reports from the three major credit bureaus (Equifax, Experian, and TransUnion), identifying potential inaccuracies, and disputing those errors to try to get the negative marks off your credit history.

For instance, they can help remove inaccurate negative items, such as late payments, collections, charge-offs, or bankruptcies. This may eventually lead to a higher credit score.

Credit repair companies differ from credit counseling organizations. While credit repair companies focus on disputing inaccurate items on your credit report, credit counseling organizations guide you in managing your debt and improving your credit habits. Credit counselors work for non-profit organizations, but credit repair companies are for profit so charge fees for their services.

Fees for credit repair services usually cost between $70 and $200 to set up an account, and some credit repair companies charge a monthly subscription fee that typically ranges from $50 to $150. Be cautious when considering credit repair companies that charge monthly subscription fees. Not only can these fees accumulate over time, but there's also no guarantee that the company will be able to remove all negative items from your credit report.

How do credit repair companies try to repair your credit?

Credit repair companies try to repair your credit by cleaning up inaccurate marks. When you hire a credit repair company, it will request your credit reports from the three major credit bureaus – Equifax, Experian, and TransUnion. Next, it comprehensively reviews each report to determine whether there are questionable or inaccurate items.

If it finds any, the company will draft a dispute letter and send it to the credit bureau with any supporting documents. The credit bureau usually has 30 days to investigate the disputed item by contacting the creditor for verification. However, a 15-day extension could apply if the credit repair company needs to provide more information. If the creditor doesn’t verify the item within that timeframe, the credit bureau deletes it from your credit report.

Removing inaccuracies from your credit history can help improve your credit score, but the change won’t happen overnight. And some credit repair services may offer other services like advising you on managing your debt and paying your bills on time. These steps can also help gradually increase your credit score.

What can’t credit repair companies do?

While credit repair companies may be able to help get inaccurate information off your credit report, they can’t do anything about true items. For example, if you have a legitimate late payment on your credit report, a credit repair company can't remove it. Disputed items may temporarily disappear from your credit report during verification but later return after the credit bureau verifies them as accurate.

Most negative marks on your credit history that are legitimate – such as judgments, late payments, and collections – remain on your credit report for at least seven years. Bankruptcies will stay on your credit report for up to ten years.

The Credit Repair Organization Act (CROA), which is part of the Consumer Credit Protection Act, limits what credit repair companies can claim to do and how they charge you. Under this act, credit repair companies can’t:

  • Ask for payment before it renders any services
  • Provide services without a written contract and a three-day grace period that lets you cancel the contract without charges
  • Guarantee the removal of accurate information from a credit report
  • Guarantee to increase your credit score

If the credit repair company got your business through a telemarketing call, it may not try to collect payment from you until it provides you with a credit report showing proof of its results at least six months after it did the work.

The CROA also requires credit repair companies to provide you with:

  • A written contract outlining the services they will do for you
  • The total charges
  • Any results they guarantee
  • A timeframe on how long it will take to achieve results

Do credit repair companies actually work?

Before considering credit repair companies, know that you can do many of the services they offer for free yourself. You have the power to get a free copy of your credit report from each of the three credit reporting bureaus at You can also dispute items on your credit report independently at no cost.

But if you don’t want to go through the time-consuming process of reviewing your credit reports and communicating with the credit bureaus to remove inaccuracies, then working with a credit repair company may be beneficial. Employees at credit repair companies have experience examining the details of a credit report, identifying issues, and disputing those issues. These services may also provide personalized advice on maintaining a healthy credit profile.

Red flags to watch out for

Unfortunately, not all credit repair companies are legitimate. Some scammers will make promises they can’t deliver and charge you exorbitant fees to do so. According to the Consumer Financial Protection Bureau, you should watch out for the following red flags when you consider working with a credit repair bureau.

  • It requires payment upfront.
  • It’s vague about the services provided.
  • It tells you not to contact the credit bureaus yourself.
  • It doesn’t let you know about your rights to a written contract and cancellation policy.
  • It withholds the actual cost of services.
  • It suggests applying for an Employer Identification Number (EIN) to create a new credit history.

How to find a legitimate credit repair company

The most effective way to find a legitimate credit repair company is to thoroughly research your rights and the services that credit repair companies can legally provide. If a credit repair company’s claims seem too good to be true, they likely are. By taking this proactive approach, you can ensure you're making an informed decision.

To find the best credit repair companies to do business with, you can check with the Better Business Bureau (BBB), the Federal Trade Commission (FTC), or the Consumer Financial Protection Bureau (CFPB) to see complaints and identify reputable companies.

Some of the best credit repair companies include:

How to repair your credit yourself

If your credit history needs repair or you need to raise your credit score, you can take some steps without paying a credit repair company. The three major credit reporting bureaus – Experian, Equifax, and TransUnion – must legally provide you with a free copy of your credit report every 12 months. Plus, you can now get free weekly online credit reports from each bureau. You can access your credit reports at or call toll-free at (877) 322-8228.

Some things to check on your credit report include:

  • Account details: Are all the accounts listed yours? Are their credit limits and account balances correct? Is the account status correctly marked as open, closed, delinquent, etc.?
  • Payment history: Are there any incorrectly reported late payments or delinquencies?
  • Liens, judgments, and bankruptcies: If you have any of these, ensure the credit report presents them accurately.
  • Hard inquiries: Did you authorize all the hard inquiries on your credit report when you applied for loans or credit cards?
  • Duplicate and unknown accounts: Make sure your report doesn’t contain any unknown or duplicate accounts, especially if they are negative. For example, if you’re divorced, ensure your ex-spouse’s accounts aren’t showing up on your report.
  • Time limits: If your report has negative marks, ensure they are not over seven years old (10 years for bankruptcy).

You should review each credit report thoroughly because they may have different inaccuracies. If you find inaccuracies, each credit bureau offers a way for you to file a dispute either online, by mail, or via phone. You can find out more on the credit bureaus’ websites.

The Federal Trade Commission provides a sample letter you can personalize and use to dispute errors on your credit report. In the letter, list the items you’re disputing and why, and then ask to have them removed or corrected. If you’re sending your dispute letter through the mail, you should send it by certified mail to get a notice when the bureau receives it.

After the credit bureau informs you that it accepted your dispute, recheck your credit report in a few months to ensure the bureau made the changes.

Other steps you can take to improve your credit

While repairing inaccuracies and misinformation on your credit report can help get you on the path to a healthy credit profile, other steps that can improve your credit include:

  • Limiting your credit card use
  • Paying your bills on time
  • Staying within your credit limit
  • Keeping your credit utilization under 30% of your total credit limit
  • Limiting new credit applications and unnecessary account closures


Is it worth paying someone to fix your credit?

Fixing your credit is something you can do on your own without having to pay someone. However, some people have found that it’s worth paying someone with expertise in working with creditors, credit reports, and credit bureaus to help with the hassles of trying to dispute and remove inaccuracies from credit reports.

Can companies actually repair your credit?

Credit repair companies can’t actually repair your credit or take off accurate negative items. Still, they can identify issues with your credit report that may hurt your credit and dispute any inaccuracies on your behalf. Fixing errors on your credit report can eventually help improve your overall credit health.

Can you trust credit repair companies?

Unfortunately, the industry has many scammers, so you can’t always trust a credit repair company that contacts you with promises to fix your credit. That’s why federal laws like the CROA exist to control what credit repair companies can and can’t promise to do for you.

Before enlisting the services of a credit repair company, educate yourself on what the service can legally do for you so you don’t fall victim to a scam. You can find resources on the law and your rights through the CFPB and the FTC.

Bottom line

If you want to repair your credit, you can obtain copies of your credit reports from the three main credit bureaus and dispute any inaccuracies you find. However, sifting through many pages of information on each report and identifying disputable errors can be daunting. This is where credit repair companies can help.

Many scammers offer false promises of overnight credit restoration. Therefore, if you choose to hire a credit repair company, make sure you understand your rights and can distinguish a legitimate company from a scam. You might also consider alternatives such as a credit counseling agency, which could help you build better credit habits at no cost.

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Author Details

Danielle Letenyei

Danielle Letenyei is a professional writer living in Madison, Wisconsin. Her interests include budgeting, travel, credit cards, insurance, and creative side gigs. She hopes her work on these topics can help others navigate the intricate landscape of personal finance.