A good credit repair company charges you only after it delivers results, discloses its fees upfront, and never makes promises it cannot keep

The Federal Trade Commission (FTC) sets hard rules about what credit repair companies can and cannot do. A trustworthy company follows those rules without exception. It does not charge you before doing work. It does not claim it can remove accurate information from your credit report. It does not tell you to dispute items you know are correct. It does not promise a specific credit score increase. And it gives you a written contract that spells out exactly what it will do, how much it costs, and how long it will take.

Beyond legal compliance, a good company is transparent about what credit repair actually is: disputing inaccurate or unverifiable items on your credit report, and following up when bureaus do not respond properly. It is not magic. It takes weeks or months. And you can do it yourself for free.

Key Takeaways

  • The FTC prohibits credit repair companies from charging you before they deliver results, and any company that asks for upfront payment is breaking federal law.
  • A legitimate company will give you a written contract that names the specific disputes it will file, the total cost, and the timeline — usually 30 to 60 days per dispute cycle.
  • No company can remove accurate information from your credit report, and any that promises to do so is lying; they can only dispute items that are inaccurate or cannot be verified.
  • You have the right to cancel a credit repair contract within three business days without penalty, and the company must refund any money you paid.
  • The same disputes a credit repair company files, you can file yourself for free through the FTC's online portal or by mail to each of the three major bureaus.

What the FTC requires credit repair companies to do

The Telemarketing Sales Rule and the Credit Repair Organizations Act (CROA) are the two federal laws that govern credit repair companies. Under CROA, a company must give you a written contract before you pay anything. That contract must include the specific actions the company will take, the total amount you will pay, the timeline for results, and your right to cancel within three business days.

The company must also give you a copy of the FTC's "Consumer Guide to Credit Repair" before you sign. This document explains what credit repair is, what it is not, and what you can do yourself. If a company does not provide this guide, it is violating federal law.

Most importantly, CROA forbids the company from charging you until it has actually delivered the results it promised. Some companies charge a monthly fee only after they have filed disputes and the bureaus have responded. Others charge only if items are removed. Either way, no money changes hands before work is done.

Red flags that signal a company is not trustworthy

If a company asks you to pay before it files any disputes, stop. That is illegal. If it promises to remove accurate information, or to give you a new credit identity or "credit privacy number," those are scams. The FTC has shut down hundreds of companies making these claims.

Watch for companies that tell you to dispute items you know are accurate, or to stop communicating with creditors. They may be setting you up to commit fraud. A legitimate company disputes only items that are actually inaccurate or that the bureaus cannot verify.

Be skeptical of guarantees. No company can may provide a specific credit score increase or promise that certain items will be removed. Credit repair works when bureaus find errors or cannot verify information. If the item is accurate and verifiable, it stays on your report.

Companies that pressure you to sign quickly, use high-pressure sales tactics, or refuse to put promises in writing are not worth your money. A good company is patient and transparent.

How to compare credit repair companies by contract terms

Once you have narrowed down to companies that follow the law, compare them on three things: what they will do, what they will charge, and how long it will take.

The contract should list the specific disputes the company will file — for example, "dispute the Equifax account marked 30 days late from March 2022" — not vague promises like "improve your credit." It should name each of the three bureaus (Equifax, Experian, TransUnion) if the company will dispute with all three. It should state whether it will also dispute with the original creditor.

On cost, compare the total fee, not just the monthly rate. Some companies charge $99 per month for six months ($594 total). Others charge a flat fee of $300 to $500. Some charge only if items are removed. Ask whether the fee includes disputes with the original creditor or only the bureaus. Ask what happens if you cancel early — do you get a refund?

On timeline, expect 30 to 60 days per dispute cycle. The bureaus have 30 days to respond to a dispute. If they do not respond or cannot verify the item, it must be removed. A company that promises results in two weeks is either lying or filing disputes it should not file.

When doing it yourself makes more sense than hiring a company

You can dispute items on your credit report for free. The FTC's website (annualcreditreport.com) lets you order your free annual credit report from each bureau. Once you have the reports, you can dispute inaccurate or unverifiable items directly through each bureau's website, by mail, or by phone.

The process is the same whether you do it or a company does it. You send a dispute letter naming the item, explaining why it is inaccurate or unverifiable, and asking the bureau to investigate. The bureau has 30 days to respond. If it cannot verify the item, it must be removed.

Hiring a company makes sense if you have many disputes, do not have time to manage the process yourself, or want someone to follow up if bureaus do not respond properly. It does not make sense if you have one or two items to dispute, or if you are not sure whether the items are actually inaccurate.

Before you pay for credit repair, try disputing one item yourself. You will see how straightforward the process is, and you will know whether you need help.

How to verify a company's license and complaint history

Credit repair companies are regulated by state attorneys general and the FTC. Before you hire a company, check whether your state requires it to be licensed. Some states (California, Florida, Georgia, New York, and others) require a license; others do not. If your state requires one, ask the company for its license number and verify it with your state attorney general's office.

Check the FTC's website for complaints against the company. Search the company name at ftc.gov/complaint. If you see a pattern of complaints about upfront fees, false promises, or failure to deliver, move on.

You can also check the Better Business Bureau (BBB) for complaints and the company's rating. The BBB is not a government agency, but it tracks complaints and how companies respond to them. A company with many unresolved complaints is a warning sign.

Ask the company for references — past customers you can contact. Legitimate companies are usually willing to provide them. If a company refuses, that is suspicious.

What happens after you sign a contract

Once you have signed and paid (if the contract allows payment upfront), the company will file disputes on your behalf. It will send you copies of the dispute letters it files. Keep these for your records.

The bureaus will respond within 30 days. The company should forward you copies of their responses. If an item is removed, the company will notify you. If the bureau says the item is verified, the company may file a second dispute or ask you whether you want to pursue it further.

Throughout the process, you still have the right to dispute items yourself. You can also contact the original creditor directly and ask them to remove the item or correct the information. Some creditors will do this without going through the bureau dispute process.

If you are unhappy with the company's work, you can cancel the contract within three business days and receive a refund. After three days, cancellation terms depend on your contract, but most companies allow cancellation with written notice.

Frequently Asked Questions

Can a credit repair company remove accurate information from my report?

No. Federal law prohibits it. A company can only dispute items that are inaccurate or that the bureaus cannot verify. If an item is accurate and verifiable, it will stay on your report. Any company that promises to remove accurate information is breaking the law and should be reported to the FTC.

What is the difference between a credit repair company and a credit counseling agency?

Credit repair companies dispute inaccurate items on your report. Credit counseling agencies help you create a budget, negotiate with creditors, and manage debt. Some agencies offer both services. Credit counseling is often free or low-cost through nonprofits; credit repair companies charge a fee. They serve different purposes.

How long does credit repair actually take?

Each dispute cycle takes 30 to 60 days. If you have 10 items to dispute, the company may file them all at once (30 to 60 days total) or in batches (60 to 120 days or more). Expect the full process to take two to six months, depending on how many items you are disputing and how the company manages the workload.

What should I do if a credit repair company charges me upfront?

Do not pay. Upfront payment is illegal under CROA. If a company has already charged you, file a complaint with the FTC at reportfraud.ftc.gov and contact your state attorney general. You may be able to recover your money through a chargeback with your credit card company or bank.

Can I cancel a credit repair contract after three days?

Yes, you have the right to cancel within three business days without penalty and receive a full refund. After three days, cancellation terms depend on your contract. Most companies allow cancellation with written notice, but some may charge a fee or keep money for disputes already filed. Read your contract carefully before you sign.