How Credit Repair Works
- Credit repair means removing inaccurate negative data from your credit report.
- You can correct credit report errors yourself for free 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 take steps to improve your credit report and raise your credit score.
Understanding what's on your credit report and how it affects your score could put you in control. It can empower you to address problems and steadily improve your credit score.
You've probably spotted ads from credit repair companies offering to do this for you. Just be aware that this will cost money. Also, sometimes the promises of credit repair companies are too good to be true.
Before you go to the expense of hiring a credit repair company, you can try several things yourself. For example, correcting errors on your credit report yourself could have very quick results. Beyond that, building consistent good credit habits could help you continue to raise your score.
You could always try hiring a credit repair firm later on if you find you can't get results on your own. Many of the steps towards good credit are actions you’ll want to learn to do for yourself anyway. You might be better off saving the expense of a credit repair firm.
Remember, every day you get to write your credit history. No matter what has happened in the past, you can start building a better record going forward.
Freedom Debt Relief is not a credit repair organization and doesn't provide, or offer, services or advice to repair, modify, or improve 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 could improve your credit quickly. You might also boost your credit by making sure creditors correct outdated or incorrect reports about what you owe.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 help, such as:
Debt management plan (DMP). This is a plan a credit counselor sets up with your creditors to make payments more manageable. It doesn't reduce the amount you owe, but it may give you more favorable payment terms. The credit counselor might also give you other financial advice. There’s typically a fee for setting up and maintaining a DMP.
Debt relief. This involves negotiating with creditors to reduce your debt. Debt relief is unlikely to fix your credit problems instantly, but stabilizing your finances could 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 (called a dispute) works well if records are inaccurate or outdated. Creditors are required to investigate disputes. If they can’t prove the information 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 could temporarily improve your credit score. But if the negative data is accurate, it’ll almost certainly show up again in a month or two.
Responsible credit repair focuses on legitimate credit report errors. You can address these errors yourself or with help from a credit repair firm. If you choose to hire a credit repair firm, it should be one that complies with the Credit Repair Organizations Act (CROA).
How the CROA can protect you
The Credit Repair Organizations Act (CROA) is a federal law that governs how companies offering or providing credit repair services operate. It includes the following provisions:
Requires credit repair organizations to provide services before charging a fee for those services.
Requires a written contract before any services are provided.
Allows customers to cancel any contract without penalty within three business days from when it's signed. The credit repair company must also provide a form and instructions for cancelling the contract.
Requires credit repair organizations to provide a written statement detailing the customer's rights before a contract for their services is signed.
Prohibits misrepresentations of their services.
Prohibits untrue statements about the customer's credit standing. This includes statements the credit repair company makes itself or any it encourages its clients to make. It extends to statements to credit bureaus, existing creditors, or companies offering credit.
Prohibits advising customers to alter their identification to hide negative credit history.
In the end, a credit repair company can't do anything you couldn't potentially do for yourself. It can check credit reports for errors and notify credit bureaus of those errors. However, it cannot control what changes a credit bureau might make or guarantee any credit score improvement as a result.
Understanding the process of fixing errors on your credit report may help you decide whether you could take these steps on your own.
DIY Credit Repair Steps
The following are some things you can do to fix any errors on your credit reports. These are some of the same steps a credit repair firm would be likely to take.
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 collect information about you in credit reports: Equifax, Experian, and TransUnion. You can view your credit reports 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 could 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
Large balances owed
You can remove negative information from your credit report
No one can wave 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 could 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 payment history.
Paying for Credit Repair
If you don’t want to dispute credit report information yourself, you could hire a credit repair company to do it for you for a fee.
Credit repair companies offer two payment arrangements:
Subscription fees. You’ll pay monthly fees as long as the credit repair company is working for you. The downside to this arrangement is that the company has an incentive to keep you subscribing for as long as possible. Also, there’s often a one-time set-up fee for enrolling in one of these programs.
Pay per delete. This involves paying a set amount for every item the credit repair company gets removed from your credit record. This can get costly, especially since there are three different credit bureaus. The same mistake may have to be removed from three records, each for a separate fee. Another downside to this arrangement is that not all removed items will improve your credit score.
How much are these credit repair fees? They range widely, depending which firm you choose and the services you sign up for. The following table summarizes typical credit repair fees:
| Type of fee | Typical amount |
|---|---|
| One-time set-up fee | Around $50 to $200, with an average of about $140 |
| Monthly subscription fee | Around $50 to $150, with an average of about $100 |
| Per-item deletion fee | Around $25 to $100, with an average of about $50 |
These costs quickly add up. For example, with a typical set-up and monthly service fee, having a credit repair subscription for just three months could set you back about $440. If you pay per deletion, having just three incorrect items removed by each of the three major credit bureaus would cost a similar amount—about $450.
Keep in mind that credit repair companies can’t do anything to fix your credit report that you couldn’t do yourself. So, it might be worth trying it on your own before committing that kind of money.
Credit Repair Timeline Expectations
How long does it take to fix incorrect items on your credit report? Count on it taking at least a month before you get some results, and the wait could be longer. Every dispute is different, but here’s a timeline to give you an idea of what to expect:
| Action | How long this step takes | Total time from the start of the process |
|---|---|---|
| Request copies of your credit report | You can get a report immediately if you request it online, or 2-3 weeks if you request a hard copy | 0-21 days |
| Review report for errors | 1 day | 1-22 days |
| Assemble documentation to dispute error | 1 day if you have everything you need Couple of weeks if you need to request missing statements | 1-36 days |
| Notify credit bureau of error | 1-2 days if you have the documentation in hand. File a dispute with each credit bureau online, by mail, or by phone. | 1-36 days |
| Get response from credit bureau | 30-45 days, depending on whether the dispute takes further investigation | 31-81 days |
| Credit score recalculated with corrected information | 1-31 days, depending on the reporting cycle | 32-112 days |
If all goes well, you could notice results within the first month. At the outside, it may take closer to four months.
Several factors could make this slower. If you dispute more than one error or contact more than one credit bureau, it could take you longer to do the work involved. Also, if a merchant has incorrectly reported information to the credit bureau, you may have to contact that merchant separately. These steps could take additional time.
This all assumes the dispute is resolved successfully. If the credit bureau disagrees there's an error, the effort may not result in any change in your credit score.
How to Research Credit Repair
If you're 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. Some 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 performing 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 stats and trends
We looked at a sample of data from Freedom Debt Relief of people seeking a debt relief program during December 2025. The data uncovers various trends and statistics about people seeking debt help.
Debt relief seekers: A quick look at credit cards and FICO scores
Credit card usage varies significantly across different age groups, reflecting diverse financial needs and habits.
In December 2025, the average FICO score for people seeking debt relief programs was 593.
Here's a snapshot by age group among debt relief seekers:
| Age group | Average FICO 9 credit score | Average Credit Utilization |
|---|---|---|
| 18-25 | 582 | 82% |
| 26-35 | 584 | 78% |
| 35-50 | 588 | 77% |
| 51-65 | 590 | 75% |
| Over 65 | 607 | 68% |
| All | 593 | 74% |
Use this data to evaluate your own credit habits, set financial goals, and ensure a balanced approach to managing credit throughout your life.
Personal loan balances – average debt by selected states
Personal loans are one type of installment loans. Generally you borrow at a fixed rate with a fixed monthly payment.
In December 2025, 44% of the debt relief seekers had a personal loan. The average personal loan was $10,718, and the average monthly payment was $362.
Here's a quick look at the top five states by average personal loan balance.
| State | % with personal loan | Avg personal loan balance | Average personal loan original amount | Avg personal loan monthly payment |
|---|---|---|---|---|
| Massachusetts | 42% | $14,653 | $21,431 | $474 |
| Connecticut | 44% | $13,546 | $21,163 | $475 |
| New York | 37% | $13,499 | $20,464 | $447 |
| New Hampshire | 49% | $13,206 | $18,625 | $410 |
| Minnesota | 44% | $12,944 | $18,836 | $470 |
Personal loans are an important financial tool. You can use them for debt consolidation. You can also use them to make large purchases, do home improvements, or for other purposes.
Regain Financial Freedom
Seeking debt relief can be the first step toward financial freedom. Are you struggling with debt? Explore options for debt relief to regain control of your finances. It doesn't matter how old you are or what your FICO score or credit utilization is. Take the first step towards a brighter financial future 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
Kimberly Rotter
Kimberly Rotter is a financial counselor and consumer credit expert who helps people with average or low incomes discover how to create wealth and opportunities. She’s a veteran writer and editor who has spent more than 30 years creating thousands of hours of educational content in every possible format.
What is the CROA?
The Credit Repair Organizations Act is a federal law governing how credit repair companies work. This law:
Bans credit repair companies from requiring payments in advance of performing services
Requires them to give you a written contract when you hire them
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. The easiest way is to click the “dispute” button while viewing your credit report online.
If two or more bureaus report the same error, you must contact each one. Try starting with an online dispute and move 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 nonprofit 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.
How often should you check credit reports?
Under normal circumstances, check your credit reports from each of the three major credit bureaus at least once a year. However, it's a good idea to keep an eye on your credit score more often than that. This should be easy because some credit card companies make your score available on your statements. If you notice a sudden change in your credit score or suspect your credit may have been compromised, it’s better to check your credit reports more often than once a year.
What are the most common types of credit report errors?
Here is a list of common credit report errors:
Errors in identity information such as name, address, and phone number
Accounts listed on your report that belong to someone with a similar name
Fraudulent accounts opened in your name
Closed accounts reported as still open
Incorrect dates for account events
Outdated or incorrect information on payment status
Duplicate entries of the same account
Accounts with outdated or incorrect balance amounts
Accounts with outdated or incorrect credit limits
Credit Card Debt
