Should you consider a credit repair service?

Credit repair services often use shady tactics to deliver quick fixes to your credit. Here’s what you should know


When it comes to credit repair, anything that can legitimately be done, you can do yourself. And a do-it-yourself option is almost always going to be cheaper than paying someone else to do it for you. Here’s what you should know about credit repair services.

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There may come a point in your financial life when you consider using a credit repair service.

If you find yourself in a financial pickle with a very low credit score or some past credit sins standing between you and a major purchase or other life event, this can be a tempting option to look into.

Generally speaking, there’s no harm in just checking it out, right? Make the call and someone else solves my problem for me.

But seriously, when was the last time a stranger-for-hire actually solved a complex financial problem for you?

I would caution anyone considering this as an option to stop and think it through first. Because if you jump into the credit repair company swimming pool, you may find it hard to extricate yourself if you change your mind. I would like to change your mind right now. I am not alone in my concerns.

Check out all the answers from our credit card experts.

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What you should know about credit repair services

When it comes to credit repair, anything that can legitimately be done, you can do yourself. And a do-it-yourself option is almost always going to be cheaper than paying someone else to do it for you.

DIY is not practical for some things, of course, but I can tell you that in the case of cleaning up your credit it is not only practical – it’s the best and the safest way to do it. And aside from some possible postage and copy expenses, it will also be basically free to do it yourself.

For those of my readers who have more cash than time and usually hire others to do what they might do themselves, there are other issues besides cost to give you pause before hiring a credit repair company.

Full disclosure: I am very proud of a book I was privileged to write for John Wiley and Sons called “Credit Repair Kit for Dummies” back in 2006. I’ve updated it a few times, with the latest edition still selling briskly.

So, this is a topic I know something about. But you should also know that I am not the only one who will tell you that you can – and in fact, you should – take care of this problem yourself. The Federal Trade Commission and the credit bureau have explored this topic on their respective websites.

See related: How long does it take to improve bad credit?

What laws are in place to regulate credit repair services?

The federal government long ago recognized that one of the biggest problems with the credit repair business was the outrageous claims they were making in marketing their services, their high upfront fees and their lack of success in delivering promised results to the public.

The Credit Repair Organizations (CRO) Act of 1996 was signed into law as part of the Consumer Credit Protection Act. One of the major congressional findings regarding credit repair organizations was that “certain advertising and business practices of some companies engaged in the business of credit repair services have worked a financial hardship upon consumers, particularly those of limited economic means and who are inexperienced in credit matters.”

If that is not enough to give you second thoughts, the stated purpose of the CRO Act is “to protect the public from unfair or deceptive advertising and business practices by credit repair organizations.” So, while credit repair companies’ advertising may have softened a bit, most still require a binding contract.

Why you shouldn’t use a credit repair service

It remains true that you can do anything they can do and it won’t cost you hundreds of dollars to do so. Nor will doing it yourself require you to sign a contract that may get you in trouble or be hard to get out of if you change your mind.

No matter what you are told, information that is accurate and not out of date on your credit report cannot be “legitimately” removed, at least not in a permanent way. One of the quick fixes sometimes offered by less-than-reputable companies is to flood the credit bureaus with enough fictitious disputes of valid information in your credit report in order to bog down the system.

Doing so may temporarily remove items from your credit report, simply because the credit reporting agencies are required to investigate disputes in a timely manner. But once the information has been verified – and trust me, it will eventually be verified – the items will land right back on your credit report.

Plus, the bureaus have a protocol for handling what they identify as “frivolous disputes” that may impact any future disputes. You cannot simply try to erase items you’d rather not have on your report, like late payments or charge-offs, that are bringing your score down.

They will not stay off your report for long and you are likely to do more harm than good in trying. And if you try to secure some kind of loan or funding during the time your dispute is being investigated that could be considered fraud and you could be prosecuted. Ouch!

Another credit repair strategy involves establishing a new identity for you using an employer identification number instead of your Social Security number. The idea is that with a new ID you’re clear to develop a good credit history and leave all the bad stuff behind.

Savvy creditors will see around this dodge when your credit report shows little or no activity. If this gambit works, you may wish it hadn’t. Why, you may ask? Because you’ve established a false identity and gotten credit under false pretenses. Double ouch!

See related: How to fix and dispute credit report errors

Alternatives to credit repair services

So, what can you do? If you think there are things on your credit report that should not be there, get copies of your credit reports and go over them (all three) with a fine-toothed comb. You can get free copies of your reports online every week through April 2021 at

If you find errors – maybe an account you don’t recognize or a balance you thought was paid off – you can request more information. If it turns out those items are an error, they will be removed.

This is where copy costs and postage will come into play. For instance, if you know you have paid off an account that is still showing a balance, you will need to provide proof of payment. The best way to communicate with the credit reporting agencies is via the good ol’ U.S. Postal Service.

Be sure to keep copies of everything you send and when you send it, do so via certified mail with return receipt requested. As noted above, the credit bureaus must verify your claim and remove the item in a timely manner (generally within 30 days).

Other tools include using a rapid rescore service to give you points for recently paying down balances, adding positive consumer supplied data such as on-time rental payments via a rent-paying service, adding utility or phone payments via Experian Boost or adding banking data via UltraFICO.

See related: Coronavirus: How to prepare for credit missteps

Bottom line

Fair warning: Repairing your credit on your own will likely take a good bit of time. As a result, I advise people who are planning to apply for a loan, mortgage or other large credit commitment to allow at least three to six months to review and correct any errors on your credit reports.

It can be tempting to hire someone to wave their magic wand over your damaged credit report to erase blemishes, especially if they are promising quick results. But I hope you can resist because chances are you won’t get the results you were hoping for. Instead, it may be more damaging than a dinged credit report.

Time and patience are both necessary and required in order to dispute errors. But it will be worth it in the end, believe me.

Remember to keep track of your score!

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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