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Credit Repair Scams

 A poor credit history can be a real hindrance for people trying to recover from financial setbacks and getting behind on bills. Scammers exploit that vulnerability with phony promises of a quick credit fix.

You may have seen ads on TV or online, or received a mailer or phone call, offering to fix whatever credit woes you might have. Shady companies claim they can remove bankruptcies, liens and bad loans from your record, or even erase a bad credit history completely, helping you start over with a new credit identity that will make you look like a better risk to lenders. 

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The fact is that no one can remove bad information from your credit report if it is correct and timely. If a debt, bankruptcy or other item was accurately reported, it stays on your credit record for up to 10 years. Negative data can be deleted if it is proven to be incorrect or out of date.

Legitimate credit-repair firms say they know how to navigate the complexities of credit reporting to find and fix those errors. But they can’t legally do anything you couldn’t do yourself, for little or no cost: file disputes with the major credit bureaus (Equifax, Experian and TransUnion) about negative items, in hopes that investigation will show them to be wrong.

Bogus credit-repair companies resort to illegal tactics, or use the promise of cleaned-up credit to lure you into committing crimes yourself. For example, they may offer to sell you a new Social Security number to use in applying for loans. The number was probably stolen, possibly from a child, and using it could send you to prison.

Crooks might also offer you an alternative nine-digit number called a CPN (credit privacy number or credit profile number), or direct you to falsely obtain an Employer Identification Number (EIN) from the Internal Revenue Service. Using one of those can get you in legal trouble, too.

Scam Tracking Map

No matter where you live, fraud is never far away. Report a scam or search for existing scams near you.



One scheme centered on a Michigan credit-repair firm called Financial Education Services allegedly reaped more than $213 million from consumers before the Federal Trade Commission (FTC) won a May 2022 court order that temporarily shut down the sprawling operation and froze its assets.

According to the FTC, the company and its affiliates preyed for years on people with low credit scores, advertising in English and Spanish that it could cull negative items from credits reports, charging monthly “junk fees” and aggressively recruiting customers into a pyramid scheme to line up additional clients.

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Warning Signs

  • A credit-repair company says it can get bad debt off your credit record, guarantee a better credit score or give you “a new credit identity.”
  • The company tells you to give false information on loan applications.
  • The company urges you to dispute information in your credit report that you know is accurate.
  • The company tells you not to contact the credit bureaus yourself.

How to protect yourself from this scam

  • Do regularly check your credit history. Through the end of 2023, you can get one free credit report a week from each of the three national reporting agencies, Equifax, Experian and TransUnion.
  • Do dispute inaccurate information by contacting the credit bureaus directly.
  • Do know your rights when it comes to credit repair. The federal Credit Repair Organization Act requires companies to give you a written contract that spells out the services it will perform, what you’ll pay and how long it will take to get results.
  • Do remember that there’s no legitimate quick fix for poor credit. Improving your record takes time and effort, and requires sticking to a personal plan to pay off your debts, the FTC says.
  • Do consider contacting a reputable credit counseling organization instead of going to a credit-repair firm. Credit counselors can help you create a plan to manage your debts and develop a budget you can stick to.
  • Don’t sign up with a credit-repair company that insists upon payment before it does any work on your case.
  • Don’t trust companies that are secretive about their methods or claim they alone can fix your credit problems.
  • Don’t follow instructions to lie on a credit or loan application. It’s a crime that could result in fines or a prison term.
  • Don’t follow advice to apply to the IRS for an Employer Identification Number to use as a substitute for your Social Security number when you apply for credit. Obtaining an EIN under false pretenses is a crime.

More Resources

Scam Tracking Map

No matter where you live, fraud is never far away. Report a scam or search for existing scams near you.