How Does Credit Repair Work?
- Credit repair means removing inaccurate negative data from your credit report.
- You can correct credit report errors yourself or get professional help.
- If you want professional help, talk to a nonprofit credit counselor before you pay for a credit repair service.
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Your credit problems don’t have to last forever. You can do things to improve your credit report and raise your credit score.
If errors are lowering your credit score, credit repair can improve your score very quickly. Then, as you follow good credit habits, your credit score can continue to rise.
The key steps to credit repair are things you can learn to do yourself if you want to. You could also hire a credit repair company to work on your behalf. Just keep in mind that credit repair companies cost money, and sometimes the promises are too good to be true.
Whether you work on credit repair yourself or hire a pro, understanding how the process works can help you make better decisions about improving your credit.
What Is Credit Repair?
Credit repair improves your credit standing by removing inaccurate negative information from your credit report.
Working with the three major credit bureaus to clear up mistakes on your credit record can improve your credit quickly. You may also boost your credit by making sure creditors correct outdated or incorrect reports about what you owe.
Credit repair isn't like other types of credit help, such as:
Credit counseling: This involves having a trained specialist look at your finances and work with you to develop a plan to address your money problems.
Debt relief: This involves negotiating with creditors to reduce your debt. While this is unlikely to fix your credit problems instantly, it can lead to better credit scores over time.
How Does Credit Repair Work?
Credit repair works by removing negative events from your credit history. Your request for removal works well if records are inaccurate or outdated. Creditors are required to investigate disputes. If they can’t prove the data is accurate, the credit bureau must remove it from your credit report. This process takes up to 45 days.
You have the right to dispute just about any item on your credit report. This is where disreputable credit repair services try to exploit the system. They dispute every negative item without concern for whether it’s accurate. A blitz of disputes can temporarily improve your credit score. But if the negative data is accurate, it’ll almost certainly be reported again soon.
Find any negative information on your credit report
Your credit file includes the history of how you’ve used credit accounts and how you currently use them. It also includes bankruptcy filings.
Three major credit bureaus compile this data into credit reports: Equifax, Experian, and TransUnion. You can view yours for free at AnnualCreditReport.com. They rely on information from banks, credit card companies, and other organizations issuing consumer credit.
Some of the data collected can hurt your credit score. Things that can count against you include:
Delinquent payments
Debts referred to collection agencies
Accounts closed or debts settled without full payment of the amount owed
Bankruptcy filings
You can remove negative information from your credit report
No one can make a magic wand and make things disappear from your credit report. However, you have the right to get incorrect entries on your credit record removed.
A study by Consumer Reports found that approximately 44% of people had an error on at least one of their credit reports. So, it pays to check those reports periodically for mistakes that may hurt your credit.
Here are some reasons to remove items from your credit report:
The entry is inaccurate.
The information is outdated.
The same information is entered more than once.
Identity theft created accounts in your name.
Contact the credit bureau to get negative information off your credit reports
If you find things on your credit reports that are wrong, follow these steps:
If you can, find proof that the information is incorrect. This may include updated account statements or correspondence with creditors.
Contact the credit bureau or bureaus showing incorrect information. You can do this online, by mail, or by phone.
If a mistake appears on the reports of more than one credit bureau, you’ll have to contact each bureau separately to get it cleared up. You’ll find contact information on your credit report.
Under the Fair Credit Reporting Act, the credit reporting company must respond to you about potential errors in writing.
If you and the credit bureau can't resolve a dispute, you can request that a statement be added to your report. This statement should summarize your reasons for disputing the information on the credit report.
Check back later to ensure the agreed-upon changes are reflected on your credit report.
Once you fix any mistakes on your credit record, the key to improving your credit score is to use credit wisely. Over time, work on building a positive credit history.
Paying for Credit Repair
If you don’t want to dispute credit report information, you could hire a credit repair company to do it for you. Of course, this means the process will cost you money.
Credit repair companies offer two payment arrangements:
Subscription fees: These are monthly fees for as long as the credit repair company is working for you. The downside to this arrangement is that the company has the incentive to keep you subscribing for as long as possible.
Pay per delete: This involves paying a set amount for every item the credit repair company gets removed from your credit record. The downside to this arrangement is that not all removed items will improve your credit score.
Credit repair companies can’t do anything to fix your credit report that you couldn’t do yourself.
How to Research Credit Repair
If you are considering a credit repair service, do some research on the company offering that service. Try these steps:
Search for the company on the Better Business Bureau (BBB) website.
Do a general internet search to find additional background.
Find out how long the company has been in business.
Look at review websites that offer lists of the best credit repair companies.
Search for the name of any credit repair company you’re considering on the Consumer Financial Protection Bureau (CFPB) website.
Besides digging up some background on any credit repair company you’re considering, think about how they work and the promises they make. Certain practices are red flags that the service is a scam.
Credit Repair Scams: What to Look For
How can you spot whether a credit repair service is a scam? Here are some common warning signs:
The organization requires payment before completing your services, which is illegal under the Credit Repair Organizations Act (CROA).
They recommend disputing credit report information you know to be accurate.
A representative encourages you to use an Employer Identification Number or another ID number instead of your Social Security Number.
They ask you to make false or misleading entries on a credit application.
Someone discourages you from contacting the credit reporting bureaus directly.
The company fails to offer you a written contract, including a statement of your legal rights.
Their paperwork requires you to waive your rights under the CROA or any other law.
Besides keeping an eye out for these specific red flags, have the credit repair company explain how they intend to improve your credit. If it sounds too good to be true, it probably is.
Debt relief by the numbers
We looked at a sample of data from Freedom Debt Relief of people seeking credit card debt relief during October 2025. This data reveals the diversity of individuals seeking help and provides insights into some of their key characteristics.
FICO scores and enrolled debt
Curious about the credit scores of those in debt relief? In October 2025, the average FICO score for people enrolling in a debt settlement program was 596, with an average enrolled debt of $25,795. For different age groups, the FICO scores varied. For instance, those aged 51-65 had an average FICO score of 593 and an enrolled debt of $28,258. The 18-25 age group had an average FICO score of 548 and an enrolled debt of $15,406. No matter your age or debt level, it's reassuring to know you're not alone. Taking the step to seek help can lead you towards a brighter financial future.
Student loan debt – average debt by selected states.
According to the 2023 Federal Reserve Survey of Consumer Finances (SCF) the average student debt for those with a balance was $46,980. The percentage of families with student debt was 22%. (Note: It used 2022 data).
Student loan debt among those seeking debt relief is prevalent. In October 2025, 27% of the debt relief seekers had student debt. The average student debt balance (for those with student debt) was $48,703.
Here is a quick look at the top five states by average student debt balance.
| State | Percent with student loans | Average Balance for those with student loans | Average monthly payment |
|---|---|---|---|
| District of Columbia | 34 | $71,987 | $203 |
| Georgia | 29 | $59,907 | $183 |
| Mississippi | 28 | $55,347 | $145 |
| Alaska | 22 | $54,555 | $104 |
| Maryland | 31 | $54,495 | $142 |
The statistics are based on all debt relief seekers with a student loan balance over $0.
Student debt is an important part of many households' financial picture. When you examine your finances, consider your total debt and your monthly payments.
Support for a Brighter Future
No matter your age, FICO score, or debt level, seeking debt relief can provide the support you need. Take control of your financial future by taking the first step today.
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Author Information
Written by
Richard Barrington
Richard Barrington has over 20 years of experience in the investment management business and has been a financial writer for 15 years. Barrington has appeared on Fox Business News and NPR, and has been quoted by the Wall Street Journal, the New York Times, USA Today, CNBC and many other publications. Prior to beginning his investment career Barrington graduated magna cum laude from St. John Fisher College with a BA in Communications in 1983. In 1991, he earned the Chartered Financial Analyst (CFA) designation from the Association of Investment Management and Research (now the "CFA Institute").
Reviewed by
Kailey Hagen
Kailey is a CERTIFIED FINANCIAL PLANNER® Professional and has been writing about finance, including credit cards, banking, insurance, and retirement, since 2013. Her advice has been featured in major personal finance publications.
What is the CROA?
The Credit Repair Organizations Act is a federal law governing how credit repair companies work. It bans them from requiring payments in advance of performing services for you. It requires them to give you a written contract when you hire them and gives you the right to cancel that contract without penalty within three days.
How do I dispute a credit report error?
Dispute the error to the credit reporting bureau that issued the report. If two or more bureaus report the same error, you must contact each one. Try starting with an online dispute and moving on to written correspondence (by mail or email) if that doesn’t work.
How do you find a reputable credit repair company?
Start by looking for a non-profit credit counselor in your area. You may find one on the National Foundation for Credit Counseling website. You might be able to learn how to repair your credit yourself. If you decide that paid credit repair is a better option for you, look up the company on the CFPB website and the Better Business Bureau to make sure they are legitimate and operate on the right side of the law.
You can share the details of your situation with a Freedom Debt Relief advisor to find out what the best next steps might be for you. Freedom Debt Relief does not offer credit repair services but can help you choose a reputable credit repair company.
Credit Card Debt
