Are credit repair companies legit?
Short answer: some are legal, none can do anything you can't do yourself for free, and none can remove accurate negative information. Here's how to tell a legal company from a scam.
Updated October 18, 2026 · 6 min read · Numbers computed with our tested calculators and official sources.
What credit repair companies actually do
Mostly, they send dispute letters to the credit bureaus and creditors about items on your report — the same disputes you can send yourself, free. If an item is wrong or can't be verified, it gets corrected or removed. If it's accurate, it stays, no matter who sends the letter.
What the law says they must (and can't) do
The Credit Repair Organizations Act (CROA) says a credit repair company:
- can't take payment before it has performed the services it promised;
- must give you a written contract with the services, the total cost and how long it will take;
- must let you cancel within three business days at no charge, with a written cancellation form;
- can't make false or misleading claims about what it can do.
If credit repair is sold over the phone, the Telemarketing Sales Rule goes further: the company can't collect fees until six months after it has delivered the promised results.
When companies broke the rules
In 2023, a federal court found that the companies behind Lexington Law and CreditRepair.com illegally collected upfront fees for telemarketed credit repair. The resulting settlement included a judgment of about $2.7 billion for consumer redress, plus civil penalties.
Red flags
- Asks for money before doing any work.
- Promises to remove accurate late payments, collections or bankruptcies.
- Tells you not to contact the credit bureaus yourself.
- Suggests a "new credit identity" (a CPN) or filing an identity theft report for debts that are yours — the FTC warns that a false identity theft report is a crime.
- Sells a "609 letter" as a way to delete accounts — section 609 doesn't do that.
Do it yourself instead (free)
- Get your reports free every week at AnnualCreditReport.com.
- Dispute each error with our free letters: to the credit bureaus, late payments, hard inquiries, charge-offs, collections.
- Then focus on what raises scores over time — on-time payments and low card balances.
Want a person to help? A nonprofit credit counselor can review your credit report and budget, often free or for a small fee.
Get the free DIY Credit Repair Kit (PDF)
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Frequently asked questions
Are credit repair companies legit?+
Some are legal businesses, but they can't do anything you can't do yourself for free, and none can legally remove accurate, current negative information. Many have broken the law — in 2023 a federal court entered a $2.7 billion judgment against the companies behind Lexington Law and CreditRepair.com for illegal upfront fees.
Is credit repair worth it?+
Usually not. Disputing errors is free and takes a few minutes with a template. A company may save you time if you have many errors across many accounts, but check that it follows the Credit Repair Organizations Act: no payment until work is done, a written contract, and a three-day right to cancel.
How much does credit repair cost?+
Companies commonly charge a setup fee and a monthly fee. Under federal law they can't charge you before they've performed the services they promised — and for credit repair sold by phone, not until six months after delivering the promised results. Doing it yourself costs only postage.
What credit repair company is the best?+
For most people the best option is no company: dispute errors yourself with free letters, then focus on on-time payments and low card balances. If you want help, a nonprofit credit counselor (look for NFCC membership) can review your credit and budget, often for free or a small fee.
Do credit repair companies work?+
They can get errors fixed — by sending the same disputes you can send yourself. They can't make accurate late payments, collections or bankruptcies disappear, whatever they promise.