If you’re working to improve your credit score, chances are you’ve seen ads for credit repair companies. Some offer real help, but many use shady tactics or make promises they can’t keep. That’s why the Credit Repair Organizations Act (CROA) exists.
CROA protects you from credit repair scams and false claims in the credit repair industry. It gives you clear rights and holds companies accountable for how they market and deliver their services.
Before you hire any credit repair company—or try fixing your credit on your own—it’s important to know how CROA works and how it protects you.
What Is the Credit Repair Organizations Act (CROA)?
The Credit Repair Organizations Act (CROA) is a federal law that protects consumers from dishonest credit repair companies. It sets clear rules these companies must follow when offering credit repair services.
If you are trying to improve your credit score, it is easy to fall for promises that sound too good to be true. CROA helps ensure you have accurate information and safeguards against scams. The law gives you important rights and limits what credit repair companies can say and do.
See also: Best Credit Repair Companies of June 2025
How CROA Protects You
CROA gives you several protections when dealing with credit repair companies. Here are some of the key rules the law puts in place:
- Written contract required: Credit repair companies must give you a written contract that explains their services, costs, and your legal rights.
- No upfront fees: They cannot charge you until they have completed the services they promised.
- Three-day cancellation window: You have three business days to cancel your contract without any fees or penalties.
- No false claims: Companies cannot tell you to lie about your credit history or suggest illegal ways to improve your credit score.
Common Illegal Credit Repair Practices to Avoid
Some credit repair companies try to break the rules. Watch out for these illegal practices:
- Charging upfront fees: If a company asks for payment before providing any services, that is a violation of CROA.
- Promising to remove accurate negative information: No company can legally remove accurate and verifiable negative information from your credit report.
- Suggesting you create a new identity: Any advice to use a false Social Security number, credit privacy number, employer identification number, or other fake identity is illegal.
- Misleading advertising: Be cautious of companies that guarantee a higher credit score or offer a “quick fix.”
What to Do If a Company Violates CROA
If you think a credit repair company is violating CROA, take action right away:
- Document everything: Keep copies of contracts, emails, payment records, and notes from phone calls.
- Report the company: Contact your state Attorney General and the Consumer Financial Protection Bureau to report the violation.
- Consult an attorney: A lawyer who focuses on consumer rights can help you understand your options and take legal action if needed.
- File a complaint with the Federal Trade Commission: The Federal Trade Commission enforces CROA, and you can submit a complaint through its website.
How to Choose a Legitimate Credit Repair Company
If you decide to hire a credit repair company, choose carefully. Many companies make promises they cannot legally keep. Use these tips to find one that follows the rules:
- Look for a written contract: The company must give you a detailed contract that outlines services, fees, and your rights under CROA.
- Check for transparency: Legitimate companies explain what they can and cannot do. Be wary of vague answers or unrealistic promises.
- Confirm no upfront fees: Any request for payment before services are completed violates CROA.
- Research the company: Look up reviews online and check for complaints through the Better Business Bureau.
- Ask questions: A reputable company should clearly explain your rights and be willing to answer your questions in detail.
Should You Repair Your Credit Yourself or Hire a Pro?
Fixing your credit does not always require hiring a professional. In many cases, you can manage the process on your own. Here is how to think through the decision:
DIY credit repair may be a good option if:
- You are dealing with simple errors on your credit report.
- You have the time to write letters and follow up with credit bureaus.
- You want to save money and avoid service fees.
Professional help may be worth it if:
- You face complex issues such as identity theft or large-scale errors across multiple credit bureaus.
- You do not have the time or confidence to manage the process yourself.
- You want guidance from a company that knows credit laws inside and out.
Whichever route you choose, remember that no one can remove accurate negative information from your credit report.
See also: Do-It-Yourself Credit Repair Guide for 2025
Bottom Line
The Credit Repair Organizations Act protects you from dishonest credit repair companies. Before you hire any service, know your rights under CROA and watch for warning signs.
In many cases, you can fix your credit yourself by checking your credit report for errors and disputing them with credit bureaus. If you do hire a company, make sure they follow the law and give you clear, realistic expectations.
Improving your credit score takes time, but staying informed and making smart choices will help you get there.
