Credit repair scam.
In plain English
A credit repair scam sells a result that cannot be delivered, promising to remove accurate negative information from your credit reports in exchange for fees charged before any work is done. The methods offered range from a new identity number to a flood of dispute letters, and neither one changes accurate history. Federal law bars credit repair organizations from charging before services are fully performed and requires a written contract with a cancellation right. Accurate negative information can stay on a report for a period set by law, and no company can shorten it. Everything a repair firm can lawfully do, you can do yourself for free.
01Why it matters
You can dispute genuine errors directly with the credit bureaus and the furnisher at no cost, and a demand for payment before any work is done identifies the firm as operating outside the law.
02The math, step by step
A firm charges $99 up front plus $79 a month for a year. That is $1,047 for dispute letters you could send for free, and accurate items return to the report after any temporary deletion.
Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.
03What this is NOT
Credit counseling agencies help with budgeting and debt management plans and are usually nonprofit. Credit repair firms sell report deletions. The first works with your creditors on repayment, the second promises to change the record itself, which is where the illegal promises live.
04Receipts
Every figure on this page is sourced to a primary document. Tap to open the original.
Plain-English answers from our glossary. Receipts included. Never advice.
Educational tool. Answers come only from ClearMoneySchool's published glossary and are not advice. Why we never give advice