March 1st, 2013

How to Spot and Avoid Credit Repair Scams

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how to spot and avoid credit repair scams

As mentioned in an earlier blog post, next week is National Consumer Protection Week, a campaign that encourages consumers to take advantage of their rights and make better-informed decisions. In the spirit of NCPW, we here at the Credit Karma Blog will be writing a series of blog posts with handy tips on how you can protect yourself.

A few days ago, we covered several ways to keep your money safe. Today, we’re going to show you how to spot and avoid credit repair scams, which are unfortunately more prevalent than we’d like.

First off, let’s cover the basics.

What is a Credit Repair Scam?

Credit repair scams are programs that prey on those who are desperate for better credit by offering to fix and wipe credit reports clean of negative marks. They often do so by promising a “new credit identity”. However, beware of these scams. There is never a “quick fix” for repairing your credit.

Choosing credit repair assistance that turns out to be a scam will only worsen your financial situation. It’ll cost you money you don’t have, it’ll waste your time, and it won’t fix your credit.

How Can I Spot a Credit Repair Scam?

Credit repair scams are usually pretty easy to spot, once you know what to look for. Watch out for any of these red flags:

  1. They promise to remove all negative marks from your credit report. No one can legally remove accurate information from your credit report, even if a credit repair agency claims that you (or they) can. Accurate negative remarks will fall off your report after seven to ten years, but you can’t do anything to speed up the process.
  2. They insist to be paid before the services have been performed. The Credit Repair Organizations Act states that a credit repair company cannot ask you for payment until they’ve fulfilled their promise of service. Never give a credit repair service your money until they’ve accomplished what they’ve promised to do.
  3. They solicit you through email. Many unsolicited emails (whether they have to do with credit repair services or not) are fraudulent, so don’t take your chances. Just throw them away or mark them as spam.
  4. They tell you to create a new identity by applying for credit using a number other than your Social Security Number. Some organizations suggest doing this so you can create a new, clean credit file. However, this is not only illegal, but also impossible.
  5. They tell you not to contact any of the credit bureaus directly. You are entitled to receive one free credit report every 12 months from each of the three major credit bureaus: Equifax, Experian, and TransUnion. Take advantage of this and pull your TransUnion credit report from Credit Karma and your other two reports from
  6. They give you a vague contract to sign. Before you sign any contracts, read through the terms and conditions thoroughly and make sure the contract contains detailed information, like the name and business address of the organization, the amount you are being charged, the date by which the services will be performed, and how to cancel the contract. If it doesn’t contain that information, or if they ask you to sign a contract before giving you a copy to review, run far, far away!

How can I Avoid a Credit Repair Scam?

Simply put, the best way to avoid credit repair scams is to improve your credit health yourself. There is legally nothing a credit repair company can do to improve your credit that you can’t do yourself.

When investigating your credit yourself, make sure you know your rights.

You are entitled to receive one free credit report every 12 months from each of the three major credit bureaus: Equifax, Experian, and TransUnion. Take advantage of this ability and pull your reports from, the only government-approved site to get your reports for free.

In addition, you’re entitled to a report in the following situations:

  • If a company denies your application for credit, insurance, a loan, or employment. Contact the credit bureau that provided your report to the company within 60 days of receiving notice of the action.
  • If you’re unemployed and plan to seek employment within 60 days, if you’re on welfare, or if your report contains inaccuracies due to fraud, such as identity theft.

Once you’ve received your reports, review them carefully and dispute any errors.

Bottom Line: Not all credit repair agencies are scams, but be sure to do your research with the BBB, FTC, and your state attorney general before using a company’s credit repair services. Or, to be even safer, try repairing your credit yourself.

If you’ve already been a victim of a fraudulent credit repair service, report the abuse, especially if you’ve lost money due to credit repair fraud. Contact your local consumer affairs office or your state Attorney General to report the abuse.

Want more information? Check out the NCPW Consumer Topics. And stay tuned to the Credit Karma Blog for more on how to protect yourself.


helps manage the social media channels and blog at Credit Karma. Although her specialty lies in creating witty post-it notes, she also enjoys sharing all the financial information she’s learned since joining Credit Karma in February 2012. When she’s not working, you can probably find her trying out a new dessert recipe or learning/perfecting any musical instrument she can get her hands on. She may or may not have created a Twitter specifically to put in this byline. Say “hi” @leejennaa!

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Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.


  1. Thanks for awaring article. If you have basic information of the laws and rule governing the credit repair industry is an excellent step towards keep away from a credit repair scam.

    Devna Sulivan at 4:31 am on March 2, 2013
  2. Thank you for listing ways to identify credit repair scams. It is so wrong for people to be scamming anyone, but particularly those people who are already vulnerable due to their credit problems. As you said knowing your legal rights and working on repairing your credit report yourself are definitely ways to avoid being taken advantage of. I wonder how to know if a credit repair specialist is above board?

    Bob Gold at 4:56 pm on March 2, 2013
  3. Great article! I often have folks ask me to identify scams for me. In future, I’ll just point them to this article.

    Josh @ Live Well Simply at 5:20 pm on March 2, 2013
  4. Very good information. There are legalities that good credit restoration companies can help with so you don’t waste your time.
    Most important make sure they are a registered CSO.
    Also, don’t necessarily trust BBB ratings. In many states the only way for a credit restoration company to get a good rating is to pay for it. They could be horrible and have a good rating.

    jeff h at 8:10 pm on March 3, 2013

    Betty Brewer at 6:36 pm on March 13, 2013
  6. I visited The guy actually worked in the dispute department for one of the bureaus and gives inside steps on how to dispute and clean up your credit free of charge. Great information. It saved me so much time and money.

    Joe Doughtry at 12:03 pm on May 26, 2013
  7. I hope more consumers take time out to explore more consumer protection laws on the the state and federal levels. It’s very important as a consumer to know some of these things. Nice Article!

    Andre Vaughn at 6:36 pm on June 28, 2013
  8. In the issue of repairing your credit, it is best to
    do it yourself. Most often, you may hear or see
    advertisements claiming outstanding credit repair
    services offering you “legal” and “guaranteed”
    solutions for your credit problems. These services may
    use mottos that are quite enticing to those who are in
    dire need of credit repair. There are even others who
    get easily convinced after reading “authentic”
    testimonials from several customers, who might not
    actually exist.

    Tit at 9:45 am on August 28, 2013
  9. Yo necesito reparar mi credito mucho de lo q an dicho me a pasado pero no e caído el ultimo fue Legal Credid y se ohia y parecían honestos salen por tele pero creo piden demaciado ustedes hablan de ciertos años pero yo llevo mas de dies años y mi credito la puntuación no suve y es q las compañías de credito no actualisan tu estatua y por eso es espero me oriente q agosto si escribo cartas o q yo no tengo nada grave es sencillo y algunas no fue mi culpa pero no revisan necesito credito ya cojo Ss aun q soy joven quiero una tarjeta de crédito por lo men un balance de1000 o 500 ayuda.

    Orlando Rosado at 7:46 pm on September 13, 2013
  10. Jenna
    Jenna at 8:29 am on September 16, 2013
  11. I am concerned b/c it says I have credit cards on my list that have been closed for years. Why are they still showing? I want all my non used (closed) credits taken off,. Who and how do I go about this.
    Thank you.

    Donna Crawford at 4:15 am on August 7, 2014
  12. Mike

    Hi Donna – Thanks for your question. Please keep in mind that closed accounts will not fall off your report right away, and can remain on your report for 7 to 10 years. If these accounts are being incorrectly reported as open, however, you can file a dispute to have their status updated. You can read more about credit report disputes here:

    Mike at 12:56 pm on August 7, 2014
  13. I am very concern if you paid in full the amount of your credit card or loan and also notified that you was not employed in time. Why it still affects your credit. We are in 2015 and paid in full 2008. Can you explain me what can I do?

    Elizabeth at 9:23 am on January 27, 2015
  14. Mike

    Hey Elizabeth – Thanks for your question. I’d recommend checking out our Credit Advice Center to see if any other Credit Karma members have encountered similar situations. Hopefully someone there will be able to help you out. Thanks!

    Mike at 4:11 pm on January 27, 2015
  15. 2items
    1. tax lien was corrected and was not mine and only states paid not abolished sent proof in.

    2. my number dropped from 695 to 620 and you state i have bad statements and i dont know who or why
    i need help i am applying for loan

    Gerald Aronson at 5:08 pm on February 3, 2015
  16. Mike

    Hi Gerald – Thanks for your comment! If you’re seeing outdated or incorrect information on your Credit Karma account, you could always file a credit report dispute directly with the bureaus. Find out more about that here:

    Mike at 8:59 am on February 4, 2015
  17. a my credit report is a tax lien and should on my son’s credit report

    rodney helgeson sr at 7:07 pm on February 10, 2015
  18. Mike

    Hi Rodney – Thanks for your comment. If you’re seeing incorrect information on your credit report, you could always file a dispute directly with the credit bureaus. You can find out more about that here:

    Mike at 9:40 am on February 11, 2015
  19. Most credit grantors use Experian. They have a report that is all in a type of code that no layman can read. Why does CreditKarma not provide THIS report to us in plain English? Also, why can we not file a dispute in one place for all bureaus, online, instead of having to MAIL a dispute to each one? Thank You.

    Don Hering at 11:44 pm on February 18, 2015
  20. Why does CreditKarma show two of the bureaus with my credit scores at 700+, yet Experian shows me still at 500+, thus causing me to be turned down for credit?

    Don Hering at 11:52 pm on February 18, 2015
  21. Mike

    Thanks for your questions, Don! While we don’t have information from Experian, we do feature scores and reports from both TransUnion and Equifax. We take those credit reports, which can be complicated and confusing to read, and translate them into a format that we hope is more understandable and easier to navigate. You can check out your credit reports here:

    I agree that online disputes sound like a great resource, and it’s hopefully one we could provide for you in the future. In the meantime, you can learn more about how to file disputes with each credit bureau here:

    Finally, your scores from TransUnion and Equifax could be differing from Experian for a whole bunch of a different reasons. One is that the score you’re getting from Experian might be determined using a different model, not VantageScore 3.0. It’s also possible that there’s different info on your Experian report, causing your scores to diverge. You can read more about that here:

    Finally, if you have more questions or even just some feedback for us, we’d be glad to have them. Get in touch with our member support team here:

    Mike at 10:40 am on February 19, 2015
  22. I will like to be help clean my credit there is a lot on there that I do not know of so can you help me out please

    Tommy moore at 2:07 pm on May 15, 2015
  23. Enola Guerrero

    Hi Tommy – That’s a great question! Check out our article on credit health here:

    Enola Guerrero at 4:55 pm on May 15, 2015
  24. I’ve been reading about scams for credit repair on your website, yet you advertise for Lexington Law. Are they legit?

    Anne at 8:19 am on May 31, 2015
  25. Enola Guerrero

    Hi Anne – I suggest going to our reviews page to see which is the best fit for you:


    Enola Guerrero at 10:19 am on June 2, 2015
  26. I want to dispute several items on my credit report.

    Do you have standard legal forms (Florida) Simple legal forms made easy, etc.

    For example, I am disabled and now on a very tight budget. The Lexington Law firm

    is asking for $750 or $1000 down payment and $500 a month for four months.

    I have a garnishment and they are taking 15% of my gross or $350. I simply can’t afford that.

    And their contract, WOW! After one year they are removed from any responsibility? And

    their is no one in Florida, both of your referrals are in California. Can’t you refer one from

    Florida? I would love to work the Florida side or East coast side out of my home while I recover.

    So many scammers it’s sick. Please help.

    Mike S

    Michael Silvester at 10:53 am on August 19, 2015
  27. Enola Guerrero

    Hi Michael – To dispute anything on your credit report, please go here:


    Enola Guerrero at 1:55 pm on August 19, 2015
  28. If an account has been closed and charged off as bad debt is there any way to reopen or pay it back? I am a service member and i had a good history with the credit card company. I had been deployed in combat before and at the time i had access to computers and phones. So I made a pay arrangement. I ended up deploying 3 months after i made the pay arrangement and the current deployment was nothing similar to the previous because we had no source of communication with personnel outside of the country. no phone nor internet. A year later I returned and my account was closed with derogatory comments and charged off as bad debt. How do I go about cleaning this up?

    Andrew at 1:56 am on October 26, 2015
  29. Enola Guerrero

    Hi Andrew – Check out our advice center for tips and advice


    Enola Guerrero at 7:48 pm on October 31, 2015
  30. Why I did one hard enquiry an it is on my credit twice sane day an time this is craxy.

    Ann at 4:48 pm on February 25, 2016
  31. Enola Guerrero

    Hi Ann – Check out this article on removing hard inquiries you did not approve,


    Enola Guerrero at 5:04 pm on February 26, 2016

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