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Does Credit Repair Work? Can Credit Repair Companies Help?

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Credit Repair & Credit Repair Companies

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You’ve probably heard the term “credit repair” at least once or twice in your life. And, if you’re one of the 68 million score-able Americans with a bad or poor credit score (lower than 601), you’ve probably wondered if it can help your standing. But what is credit repair exactly? Let’s break it down.   

What Is Credit Repair?

Technically, credit repair can involve fixing your bad credit in any way, shape or form, but when most people use the term, they’re referring to the process of disputing errors on credit reports. You can go through this dispute process for free with each of the credit bureaus on your own. This involves filing a formal dispute with the credit bureau(s) in question either online or via snail mail. That formal dispute should provide a detailed explanation of the error and you’ll want to include any supporting documentation you have along with it. (You can learn more about disputing errors on your credit report here.)

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    Many people, however, don’t have the time or don’t understand how to make their case, so they look into hiring a credit repair company to dispute errors on their behalf. These companies can charge a fee for their legwork (more on how that works in a minute), but there are times when the extra help can certainly be welcome. (Say you have multiple errors across credit reports or you’ve been the victim of widespread identity theft.) We’ll delve deeper into both types of credit repair, starting with credit repair businesses, since there’s a good chance that’s what someone is referring to when they use the term.

    How Does the Credit Repair Business Work?

    To get to the heart of what credit repair is and how credit repair companies operate, we went to Randy Padawer, Consumer Education Specialist with partner Lexington Law, which represents consumers who want to repair their credit.

    “Credit repair leverages your legal right to three standards: Credit reports must be 100% accurate, entirely fair, and fully substantiated,” Padawer said. “Too many lesser credit repair companies skip over those last two standards — which involve communicating with your creditors — in favor of depending upon simple credit bureau disputes by themselves.”

    Here’s a good example of when a reputable credit repair service can help you do something you may not be able to accomplish yourself. If you have a collection account that’s been sold to a few different debt collectors, it may appear on your credit report multiple times. That information is accurate, but having that one debt dinging your credit score multiple times may not meet the “fair” standard Padawer mentioned.

    If you have items on your credit report that don’t meet the three standards Padawer mentioned, then you may want to consider credit repair — either DIY or via hiring a professional. (Errors are more common than you may think: a Federal Trade Commission study found that 1-in-5 consumers have an error on at least one of their credit reports. You can check your credit reports for errors by pulling them for free every 12 months at, You can also view your free credit report summary, updated every 30 days, on  This free tool breaks down your credit score into five major factors and gives you a grade for each. You can even get an action plan with tips on how to improve the credit factors that are pulling down your score. Checking your own credit reports and scores does not hurt your credit score in any way.)

    What Do Credit Repair Companies Do?

    A good credit repair company will also first pull your credit reports from each of the three major credit reporting agencies to pinpoint your credit issues. Why all three? Because each credit reporting agency has its own “data furnishers” (aka lenders, credit card companies, debt collectors, etc.) who report your credit information to them. And there may be errors that appear on one of your credit reports, but don’t appear on the others.

    Once those errors have been identified, you’ll then give a credit repair company any supporting documentation you might have or need. For example, if there’s a bill on your credit report that your husband or wife was actually responsible for under your divorce decree, you can use that document to prove it shouldn’t be impacting you.

    In some cases it might be difficult to determine what to include as far as supporting documentation goes — that’s another way a credit repair company can help you. For example, if you’re a victim of identity theft and a fraudulent account is appearing on your credit report, it can be tough to prove it isn’t yours since you naturally don’t have any documents relating to the account.

    When the bureaus and data furnishers receive the dispute and supporting information, they will then work with the credit repair company to determine if the item should be removed from your credit report. The major law dictating your rights when it comes to credit reporting is the Fair Credit Reporting Act, but it isn’t the only law on your side when it comes to credit repair.

    “A good credit repair company will scrub questionable credit report items against other laws — like the Fair Credit Billing Act, which regulates original creditors; the Fair Debt Collection Practices Act, which oversees collection agencies; and others that address medical illness, military service, student status and other life events,” Padawer said.

    How Long Does Credit Repair Take?

    Getting negative, inaccurate information off of your credit reports is one of the fastest ways to see an improvement in your scores. Since credit bureaus have to respond and resolve a dispute within 30 days (there are a few exceptions that may extend this to 45 days), it’s a short timeline that can help consumers who want to buy a house, get a new car or open up a new credit card soon and don’t have the time to wait to build good credit in other ways.

    But that doesn’t mean a credit repair company can tell you exactly when your credit score will improve since some consumers’ credit issues are much more complex than others.

    “Since every case and credit report is unique, no professional firm can ethically predict an exact outcome,” Padawer said. “When picking a credit repair company to fix your bad credit, don’t ask about the future, but instead ask about what real clients have seen in the past.”

    How Much Do Credit Repair Companies Charge?

    The price of credit repair can vary, depending on the company, the state you live in and what type of services you’re looking for. Before you sign a contract, be sure you understand what you’re signing up for, how much you will be expected to pay and when you will be charged. Something important to note that we will come back to later: Under the Credit Repair Organizations Act, credit repair companies are prohibited from demanding advance payment (meaning they can’t charge you before any work is completed.).   

    When Should I DIY Credit Repair?

    Fixing your own credit is absolutely an option and any ethical credit repair company will tell you that.

    “If your situation is simple, and all you have are an obvious error or two, then you may just want to try a round of credit repair on your own,” Padawer said.

    When trying to fix your credit, be clear and concise in your disputes with the bureaus and get your documentation in order. Again, you can mail a dispute letter (remember, you’ll need to dispute each error with each bureau; they won’t clean up your credit report with their competitors!) or you can submit it online at each of the credit reporting agencies’ respective websites. (You can find more about DIY credit repair.)

    If you ultimately decide you want to hire a credit repair company or a law firm like Lexington Law to help repair your credit, you need to make sure you’re working with a reputable, ethical company.

    Are There Trustworthy Credit Repair Companies?

    You may have seen ads for companies that promise your credit score will see “a 100-point jump immediately!” Sounds fishy, right? That’s because it is. In fact, it’s illegal for a credit repair company to promise results like that and any company that does so is one you should steer clear of.

    There are other red flags you should keep an eye out for when looking for a reputable credit repair company.

    “The FTC prohibits credit repair companies from charging for credit repair before any work is complete,” Padawer said. “Run fast from anyone who asks for money upfront or who promises a new credit file overnight.”

    Here are some of the things you should want from a credit repair company.

    • They know your rights and want you to understand them, too. Before you sign any contract, a reputable credit repair company will explain your consumer credit rights to you and answer any of your questions regarding those rights.
    • They want to know your story. It’s important for a credit repair company to understand why you want to dispute an item on your report so they can make sure those three standards Padawer mentioned — accuracy, fairness and full substantiation — are upheld by the data furnishers and the credit bureaus.
    • They can explain, in detail, what they can do to represent you to the credit bureaus. Any good credit repair company knows what they can and can’t do for you and should be able to outline their services so you fully understand what you’re getting.


    Beyond Credit Repair: How to Improve Your Score

    Remember, there are lots of reasons why your credit may be in rough shape. Most are related to your spending habits. So, for instance, if you missed a few payments or your debt levels are too high (think over 30% of your total available credit limits), disputing errors won’t help your case — you’ll have to make some changes to improve your credit scores. And you may have to wait a bit to see an uptick. Most negative information can take up to seven years to age off of your credit report, though the effects on your score will lessen over time, so long as no new blemishes emerge.  

    That shouldn’t dissuade you, however, from getting started. Remember, a bad credit score can cost you some serious cash. Over your lifetime, you can lose hundreds of thousands of dollars to a bad credit score. That’s a pretty shocking number, and it should be. Bad credit means higher loan interest rates and higher insurance premiums and that all adds up over the years. Bad credit can hold you back from achieving major life goals like buying a house, going back to school, taking a dream vacation or even retiring on schedule. Fortunately, you aren’t necessarily saddled with bad credit for life.

    (Full disclosure: and Lexington Law are partners.)

    Jeanine Skowronski contributed to the reporting on this article, which has changed. Download the original article here.


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      • Gerri Detweiler

        I am not opposed to credit repair conceptually, but I have a hard time recommending most (not all) paid credit repair options. Most of the time the consumers I hear from don’t understand that what they are really paying for is for a company to do the work for them (or what that work really entails – which is often form letters). Instead they either believe (or are led to believe) that these companies can do things they can’t do themselves, including somehow remove all seriously negative information regardless of accuracy and/or increase their scores dramatically in a short period of time whether that’s true or not.

        I understand that sometimes consumers need help or guidance, and if they truly understand what they are getting into when they purchase credit repair, then that’s one thing. But I hear from consumers who believe that for the right price – sometimes thousands of dollars – their bad credit can go away quickly. I just spoke with someone in that situation last week who was about to spend $2800 she really couldn’t afford.

        When those consumers would be better off using that money to resolve debt or even to build savings to avoid future credit problems, then that’s when I think they need to weigh their options. And if teaching them what they can do on their own for free is self serving then I admit to being guilty as charged!

        • Imnutss

          All i have to say is watch out for Best Credit Repairman in NJ, the guy will take your money and disappear not return your calls, letters anything but he will keep an eye on your credit and once you get fed up chasing him and end up fixing your credit report yourself he will sue you for more money. The contract says he will get you to a certain score within 180 days but BCR doesn’t provide any proof of that score or anything, they just sue you and even the lawyer James Mayer that represents BCR is involved in the scam as his firm will forge your signatures in court papers to make it look like he is notifying you but they don’t contact you for over a year and than make up lies like you wont believe to win the judgement based on technicality that the customer had enough time to respond to the judgement but how can anyone respond to something they don’t even know about. i bought cars etc after i had the judgement but no one told me about it. i found out when I had to rent a house that there was a judgement. by the time i filed a motion to vacate (with HARD EVIDENCE) it was too late and the judge said i should have done something earlier and denied the motion, so basically BCR and James Mayer win the award for most organized criminals in the state of NJ! to add insult to injury i had to pay another $1000 to get rid of these guys and when i went to James Mayer’s office some guy gregory came out and i swear i initially thought he was a homeless person from the way he was wearing filthy clothes and smelled. (no lie) his office was a chop shop not a real lawyers office. so please be careful if you want to fix your credit you can simply go to experian or the others site and dispute info in minutes right online. Dont ever fall for credit repair companies.

          • Yvonne

            I just contacted a company called THE CREDIT PROS OF NEW JERSEY….are they legitimate? They have sentme over some information but I have not read it yet. They are also listed on the BBB which I have yet to check out. Thanks for any and all comments.

            • Gerri Detweiler

              We don’t know of this particular company unfortunately.

      • fuzzy77

        I understand the warning, but they stereotype agencies into one bad clump. Fact: I have gone through Lexington Law and Allen Michael. I have used both for 4 yrs. Allen Michael was 1st and got 12 negatives off my 3 reports. Lexington Law has gotten a total of 14 off . I have a total of 11 left spread across 3 reports. I may not be typical, but after being SCREWED by banks and defrauded by a Mortgage Broker, I have no issue if a creditor can not verify accuracy even for a debt I did have. It is their stupid game and I am going to play it legally and take full advantage of loopholes. After the fraud that forced a bankruptcy I went from a 740 to a 525…4 years later my mean FICO (not credit) score is a 667 and I was able to get a new CC and an auto loan and just qualified for a mortgage at 4.3% 30yr fixed.

        • onyx1176

          You sound a lot like me when it comes to playing the game. lol

      • heavyw8t

        The truth is that anything these people can do for you, you can do yourself. If your credit report is filled with legitimate bad entries, they can’t be removed until their longevity runs out. Some things will stay on your credit for as long as 7 to 10 years, and nobody can remove them. Legitimate black marks are just going to be there. All these agencies do for you is remove things you could do if you just do some leg work and write some letters.

        • onyx1176

          Legitimate bad entries can be removed, but that is solely up to the creditor to do so. If the creditor is tired of you and your dispute letters they will remove the debt. In many cases its not worth their time and effort to dispute the same debt every 60 days.

      • jowannapeterso

        Who did you hire? Were they any good?

      • heavyw8t

        It is the missed payments that are on your credit report. Whether you have since paid them in full or not, you missed payments. That is what is on your account for 7 years. As time passes those negatives will lose weight. The part of your post that caught my eye was “When I was notified of the debt”. You did not know you had student loan debt before being notified of it? I don’t grasp how it could be that you went to college and didn’t know you were getting student loans to pay for it.

        • Jeff

          The person didn’t state he/she didn’t know, the statement was ‘went away’.

          • heavyw8t

            Doesn’t “When I was notified of the debt” intimate that the person didn’t know of the debt?

      • Nancy Miller

        you are lucky, I have been sued because they the law firm legal helper /credit advocate law firm neglected to settle a summed account . After paying $15,000 dollars most up front fess that is illegal. they settle a citi group account which is a wolters Kluwer . scamm

        • onyx1176

          Did you ever follow up on your case and ask questions about their actions on your account?

      • Gerri Detweiler

        We have a policy of not publishing the names of individual credit repair firms for a couple of reasons. First, if we did we would be overrun with comments from firms trying to promote their services, and secondly, we unable to vet them or verify their claims. We certainly don’t want to promote scammers.

      • Dave

        I had a 593 credit score and got denied for a car loan in September 2014. I got a credit report and went to all 3 credit organizations online and disputed the fraud on my accounts and paid a collections agency to delete me from their negative records($75). In November 2012 I had a 615 score where I was able to get a Capitol One card(one of the easiest ones with bad credit). It had credit monitoring on it and paying on time I’m now up to a 667. Their online tools come free with the card and show you everything you need to build your credit and you can input different scenarios and it will modulate what it would do to your credit. No need to pay anyone. Just pay on time, don’t spend over 30% of your maximum credit limit, and watch your score increase. Simple. I’m no credit expert but if you do what I did you will see an increase.

      • Jenny

        I had almost same result, I used CCSR Consulting Group, they are in LA

      • andrew


      • shelly

        did you get your credit score resolved?

      • Rachel

        What was wrong with your credit? Will they be able to remove late payments off?

      • Don

        Shea, I couldn’t agree more with what you are saying here. I found a guide that does exactly what you are talking about and has sample letters to help people do it. I have been using it now for three months and have already stuck it to several collection agencies that broke the law. This is really a common thing and can be used easily to resolve the listings.

        • Rachel Farrar

          Don, where did you find that guide?

          • Credit Experts

            Though we can’t speak to where Don found his information, here are CFPB sample dispute letters

      • SamSosa

        So who know how to negotiate with a collection agency to persuade them to take this off?

      • stephanie

        Any way to let me know the name of your company. I don’t know what I don’t know when it come to my credit report and could use some guidance.

        • Gerri Detweiler

          Stephanie – We tend not to publish credit repair company info on our site. If we did we’d be flooded with comments and no way to verify who is legit. One place to start is with your free credit report card from, which will tell you what areas of your credit are strong and which need some work.

      • Anthonycreditcoach

        Ok so lets see how many things people pay for that they can do themselves. HHHHMMMM a meal, wash their car, build a house even. It has nothing to do with doing it yourself there are lots of things we can legally do ourselves that we pay for. But do you want to make sure you do it right and with a professional. People pay me for 8 years of knowing credit. Compaines that charge crazy money I will say are scams but companies that are like mine that charge $149 for 3 month programs are completely worth the money and that comes from my clients.

        • Mytown Getaway

          Wherer are you located ?

      • CW

        It just depends on the company. The one I used helped my score a ton. No, it wasn’t overnight but they never left me.

      • Daniel Yepez

        Hello Lannie, Can I ask which company you used?

        • Gerri Detweiler

          Daniel – We don’t publish the names of credit repair companies on the blog. We can’t verify them and if we do, we’ll be inundated with spam by others.

          • Daniel Yepez

            I apologize for that, I did not realize this. Thank you

            • Gerri Detweiler

              No problem! I am sure you are just looking to get back on track. Have you tried our
              free credit report card? Along with your scores it will provide an action plan for your credit.

        • Lannie LaRose-Desravines Thoma

          Daniel I lost the young lady’s phone number some years ago when I moved to another state. I haven’t been able to locate her. Sorry

        • Terry Kuhn-McCary

          As a former Collection agent, and as someone who used a Credit Repair company to fix my own credit, I can tell you that there are good ones out there and they do work. I work for one now. First off, the statue of limitations in Calif. for a collection account is 4 years from the first date of delinquency on a written or oral contract. So many collection agencies will manipulate consumers into paying an account that is no longer valid, then all they do is report the balance a s paid while it still hurts your credit. Second, there are certain steps that we as a credit repair company take and professional backgrounds we have that do give us an advantage over the average consumer.

      • Kenny

        Wait until they sue you, file an answer (general denial, look online) then negotiate a settlement. You can do it yourself, just don’t let them get a default judgment.

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