Published: September 2026 | Reading Time: 12 minutes
Choosing a credit repair company is unusual among hiring decisions, because federal law has already written most of the checklist for you. A legitimate company cannot charge you before it has done the work, must hand you a written contract stating the total cost and how long it expects to take, must give you a separate written statement of your legal rights, and must give you a cancellation form good for three days. A company that falls short on any one of those is not a cheaper option or a rougher operator — it is outside the law. This guide covers how to use that checklist, the questions worth asking on the first call, how to check a company before you pay, and the alternatives that may serve you better.
Start With What the Law Requires
Credit repair organisations are governed by the Credit Repair Organizations Act. Before you compare companies on price or reviews, run each one against the statutory floor, because it eliminates most candidates in about two minutes.
The five things a company must give you
| Requirement | What it means in practice |
|---|---|
| No payment before the work is done | The FTC states it is illegal for credit repair companies to charge you before they help you. The CFPB adds that no form of upfront payment is legal, including one dressed up as a monthly plan. |
| A written contract | It must state the services they will perform, the total cost you will pay, how long it will take to get results, and any results they guarantee. |
| A written statement of your legal rights | Separate from the contract. A company that will not explain your rights when describing what it can do is a red flag in the FTC’s own list. |
| A three-day right to cancel | Without any charge, and they must give you a written cancellation form to use. |
| Honest claims | It is illegal for these companies to lie about what they can do for you. |
Ask for the contract, the rights statement and the cancellation form before you give anyone a card number. A company that treats those as paperwork to sort out later is telling you something.
Know What No Company Can Deliver
Half of choosing well is knowing what is not on the menu, because the promises that sound most attractive are the ones that mark a company as untrustworthy.
Claims that cannot be true
- Removing accurate, current negative information. The FTC is explicit that legitimate firms cannot remove negative information that is accurate and current from your credit report.
- A guaranteed score increase. The CFPB’s position is direct: no one can guarantee this.
- A new credit identity. Any offer to create a new credit identity or hide your credit history is a scam, and the version using an employer identification number in place of a Social Security number appears on both the FTC’s and the CFPB’s warning lists.
- Beating the legal timeline. Investigation deadlines are set by statute and apply to everyone equally.
Companies also cross the line when they tell you what to do rather than what they will do. The FTC lists as warning signs a company that tells you not to contact the credit bureaus directly, tells you to dispute information you know is accurate, tells you to lie on a credit or loan application, or tells you to file a false identity theft report. The last one is not a grey area. It is asking you to participate in a federal offence.
What a $200 million case looked like from the inside
In August 2026 the FTC announced action against Credit Glory and a network of affiliated entities over a credit repair operation that it alleged took nearly $200 million from consumers. Among the practices alleged: reaching people through search ads, targeting servicemembers, falsely promising that disputing debts would substantially improve scores, impersonating debt collectors and creditors on calls, filing false identity theft reports without the consumer’s knowledge, and starting with a $1 “identity verification” charge before hundreds of dollars in recurring fees. The tell was never the quality of the website. It was the $1 charge and the promise.
Questions to Ask on the First Call
The point of these questions is less the answers than whether the person can answer at all. The CFPB lists an evasive representative — one who cannot explain the service specifics or the total cost when asked directly — as a red flag in its own right.
Ten questions that sort companies quickly
- What exactly will you do on my file, item by item?
- What is the total cost, including setup, monthly and cancellation fees?
- When am I first charged, and for what work that has already been completed?
- How long do you expect this to take for a case like mine?
- Can you send me the contract, the statement of my rights and the cancellation form before I decide?
- What happens if a dispute comes back verified — is there a second round, and does it cost extra?
- Do you charge per item, and is one entry appearing on three bureau reports billed once or three times?
- How do I cancel, how much notice do you need, and what am I charged if I cancel mid-month?
- Are you registered or licensed to offer these services in my state?
- How will I see what has actually been sent on my behalf?
Question nine matters more than it looks. Some states regulate credit services organisations separately from federal law, so ask, and verify the answer with your state’s consumer protection office rather than taking it on trust.
How to Check a Company Before You Pay
Reviews on a company’s own website are marketing. These are the checks that involve someone other than the company.
Five places to look
- Your state attorney general’s office. The FTC directs consumers here to report credit repair problems, which makes it a sensible place to ask whether complaints exist before you become one.
- Your state’s consumer protection office. Same reasoning, and it is also where questions about state registration belong.
- The CFPB’s complaint system. The CFPB takes complaints about credit repair services at its complaint portal, and the public complaint record is worth searching for the company name.
- Federal enforcement announcements. Search the company name alongside the FTC’s name. Large operations often run under several corporate names at once, so search the names of the people behind it too, if the contract discloses them.
- The contract itself. Check that the business name, address and the entity you would be paying all match the company you think you are dealing with.
Two details worth pausing on
A small verification charge is not a formality. In the case the FTC announced in August 2026, a $1 charge presented as identity verification was alleged to be the entry point for hundreds of dollars in recurring fees. Treat any request for a token payment as a request for your payment details, because that is what it is.
Recurring billing deserves the same attention. Read what you are actually agreeing to, when it renews, and how you stop it. The same enforcement action alleged unlawful recurring charges made without consumers’ express informed consent.
Red Flags, Collected in One Place
Nine signals that end the conversation
Both regulators publish warning lists, and they overlap heavily. If any of these appear, stop.
| Red flag | Why it disqualifies the company |
|---|---|
| Wants payment before providing any services | Prohibited outright, in any packaging |
| Promises to remove accurate negative information | Cannot legally be done |
| Guarantees a specific score increase | Nobody controls the outcome of a furnisher’s verification |
| Cannot explain the services or the total cost | Listed by the CFPB as a red flag on its own |
| Does not tell you about your three-day cancellation right | A required disclosure, not an optional courtesy |
| Tells you not to contact the credit bureaus directly | Controls what you can see about your own case |
| Tells you to dispute accurate information | Misuse of the dispute process |
| Tells you to lie on a credit application or file a false identity theft report | Asks you to break the law on their behalf |
| Offers a new credit identity or an EIN in place of your SSN | A recognised fraud scheme |
Consider a Credit Counsellor Instead
For a lot of people the better answer is not a better credit repair company. If the underlying problem is debt rather than reporting errors, a credit counselling organisation addresses the cause instead of the record. The FTC publishes questions to ask when choosing one.
What the FTC says to ask a credit counsellor
- What services do you offer? Be wary of an organisation pushing a debt management plan before it has looked at your finances.
- Are educational materials available for free? Steer clear of organisations that charge for information.
- What are your fees — setup, monthly, or both? Ask for the quote in writing.
- What if I cannot afford your fees? Look elsewhere if they will not help without payment.
- Will I have a formal written agreement with you?
- Are you licensed to offer your services in my state?
- What are your counsellors’ qualifications, and are they certified by an outside organisation?
- How are your employees paid? Watch for compensation tied to signing you up for particular services.
One caution the FTC makes explicitly: non-profit status is not a guarantee of legitimacy, since some organisations charge high fees or press clients for voluntary contributions. And the same rule applies here as everywhere — be wary of any organisation that says it can remove accurate negative information, because legally it cannot be done.
The Free Route Is Still the Default
You have a legal right under the Fair Credit Reporting Act to dispute errors yourself, for free. Get your reports from AnnualCreditReport.com, adapt the CFPB’s sample dispute letters, and send them to the bureau and to the business that reported the information. The CFPB’s advice for building credit alongside that is unglamorous and effective: pay bills on time, keep credit utilisation under 30 percent, and look at secured cards or credit builder loans if you need to establish history.
When hiring someone is still the right call
Hire a company when the volume of work genuinely exceeds the hours you have, not because you believe they have access you lack. Before you decide, it is worth reading what this service costs in our guide to credit repair pricing, and how the schedule works in how long credit repair takes. If the underlying issue may be the size of the debt rather than the accuracy of the record, start with credit repair versus debt settlement instead.
Frequently Asked Questions
Sources
- Federal Trade Commission — Fixing Your Credit FAQs
- Federal Trade Commission — FTC Stops Sprawling Credit Repair Scheme (August 2026)
- Federal Trade Commission — Choosing a Credit Counselor
- Consumer Financial Protection Bureau — How to avoid credit repair service scams
- Consumer Financial Protection Bureau — Consumer Advisory: paid credit repair
This article is general information, not financial or legal advice. Rules and registration requirements vary by state, and your own situation may differ.
