Credit glossary
Credit repair organization
A company that charges to improve your credit record, regulated by the federal Credit Repair Organizations Act.
Under the Credit Repair Organizations Act, these companies can't charge you before the promised services are fully performed, must give you a written contract, and must let you cancel within 3 business days. The law also bars them from making, or advising you to make, untrue or misleading statements to a bureau about your credit. Most of what they do is send disputes you could send yourself for free.
No company can legally remove accurate, timely negative information. Warning signs include a demand for payment up front, advice not to contact the bureaus yourself, or suggestions to dispute everything, claim identity theft that didn't happen, or use a CPN. The FTC's guidance says you can do what these companies do on your own, at no cost.
Guides that go deeper
- Credit repair companies vs. doing it yourself: what you're paying forCredit repair companies use dispute rights you already have for free. What federal law requires of them, what the work involves, and the red flags.
- Spotting credit repair scams: the FTC's red flags and your CROA rightsFederal law bars credit repair companies from charging before the work is done. The FTC's warning signs, what a legal contract must say, and how to cancel.
- CPNs: why "credit privacy numbers" are a trap, not a fresh startA CPN is a nine-digit number sold as a clean credit identity. The FTC calls the pitch a scam, and using one on a credit application can be a federal crime.
Sources
- 15 U.S.C. 1679b: Prohibited practices, Legal Information Institute, Cornell Law School
- 15 U.S.C. 1679d: Credit repair organizations contracts, Legal Information Institute, Cornell Law School
- 15 U.S.C. 1679e: Right to cancel contract, Legal Information Institute, Cornell Law School
- Fixing Your Credit FAQs, Federal Trade Commission
This is education, not legal or financial advice. Spot an error? Tell us and we'll fix it.