Is Credit Repair Legitimate In 2021?

By Sa El

Credit expert, licensed Insurance agent, Real Estate agent, and Co-Founder of Credit Knocks

Advertiser Disclaimer - Some links on this page may pay us advertising fees.

Summary: We go over the legalities of a credit repair company to determine if credit repair is legit and how it works.

The last thing you want to worry about when looking for a credit repair company is if they are legit or not. 

But guess what: 

Not only are credit repair service companies bound by state laws, there are also some steps you can take to make sure you find the best credit repair company. 

In a recent study, we found that *48% of paying, credit repair clients got a 100+ credit score gain or more.   If you don't have serious time to devote to your dispute letters, we recommend you hire the pros to help.  Our #1 choice for professional credit repair.  

In this post I will answer your main question,  is credit repair legitimate? I will also show you some ways to make sure you get the most legit company possible.

What Is A Credit Repair Company?

A credit repair company is a business that focuses on helping you improve your credit report and score in exchange for a fee.

This fee is usually paid every month while the company takes over handling all the major issues that are affecting your credit. 

Now that you understand what a credit repair company is, let’s discuss what they do.

Or visit our review of the best credit repair companies of 2021

Are Credit Repair Services Legal?

While it might seem like a ton of shady stuff happens around credit repair services, they are 100% legal as long as the credit repair companies follow the state and federal laws that govern the industry. 

The name of this law is the Credit Repair Organizations Act or (CROA) which has a set of guidelines and states that credit repair companies must explain:

  • Your legal rights written in a contract 
  • In writing, the specific services they will provide
  • The total costs involved
  • Your ability to cancel within three days at no charge
  • How long it will take to see results
  • Any guarantees the company might offer

The credit repair companies are going to do what they can to provide the promised results or you can actually sue them. 

Over 45% Of People Find Their Credit Repair Service Through Online Search.

How To Evaluate a Credit Repair Company?

Finding a legit credit repair company isn't as easy as it might seem because the industry is full of scammers.

However, some very legit companies can do the work that they claim.

One huge thing to look for is a company that is interested in coaching you on how to handle your current accounts so that they don't get worse over time.

Both you and the credit repair company should have an exact guide on the steps you need to take to build and maintain your credit correctly.

It would be best if you also were reading the fine print of any contract before you sign it and ask a ton of questions.

Checking out a company's BBB profile is also critical because it shows you that the company is willing to resolve any issues that you could have come up with.

Now, I am not saying that an A or A+ rating with the BBB means the company is spotless, it just shows a history of accountability for your peace of mind.

Or visit our review of the best credit repair companies of 2021

Warning Signs Of A Credit Repair Scam

It would be great if all credit repair companies stayed away from baseless claims and outright fraud.

However, that isn’t the case, some companies even claim to be able to increase your score by hundreds of points instantly.

But here’s the thing, based on the laws set by the FTC, no one can legally remove accurate and timely negative information from a credit report.

If a credit reporting agency is telling you that they can get debt that you owe removed, you need to look somewhere else probably.

Below are a few other things to look out for: 

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A Few Warning Signs

There are a ton of warning signs that you should look for before you deal with any company.  

When it comes to credit repair companies you should be looking at places that: 

  • Don’t explain your legal rights
  • Want you to pay them before they do any work
  • It plans to dispute all information in your credit report.
  • Tell you to give false information regarding your credit or loans
  • The company promises to help you “create a new credit identity.”
  • It guarantees your credit will be improved if you use their services
  • The company tells you not to contact any credit reporting agencies.
  • It guarantees that it can remove accurate negative credit information.

And here's the thing, if you are in the middle of having your credit repaired and you notice something odd or off, just don't make the next payment until that issue is fully addressed.

Wanna Know the Easy Way to Repair Your Credit?

In a recent study, we found that *48% of paying, credit repair clients got a 100+ credit score gain or more.   Get help from the pros! ​Check out our #1 choice for professional credit repair.

Keep Records Of Everything

You must keep the names and phone numbers of any person that you speak with at a credit repair service, along with the date and time you talked to them.

You want to make sure you can hold someone accountable for what they said, as well as be able to go after them in court if you have to.

Ending up with a dishonest credit repair company can slow down your ability to fix your credit by months or even years.

Always be wary when a company starts to make promises that are illegal to make or that they really can’t meet. 

Or visit our review of the best credit repair companies of 2021

Choosing A Legit Credit Repair Service

The most important thing to remember before you start looking into a credit repair company is that there are absolutely NO state licensing requirements. 

I point this out because while the business has to be licensed to operate in their state, there isn’t any type of education or training that they go through before offering the services.

This eliminates your ability to check for a state license or any continuing education. 

Your next best step is going to be to do a few things: 

  • Read online reviews of the company by searching Google
  • Check out the company’s BBB page
  • Check to see if the company is in the CFPB complaint database
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Increase Your Credit by 100+ Points

In a recent study at Credit Knocks, we found that *48% of clients who used a credit repair company got a credit score increase of 100+ points.

Consultation is quick, easy, and free.

You also should keep away from any company that seems too good to be true, your alarm bells should go off if they make any of these claims: 

  • They can remove accurate negative information from your reports
  • Offer to create a new credit identity for you legally
  • Ask you to pay before it provides services
  • Guarantee to improve your credit

Figuring out a long-term strategy for repairing your credit should always be your primary goal.

However, getting help from a credit repair company could speed up the process and help you better understand how credit works.

Or visit our review of the best credit repair companies of 2021

What a Legitimate Company Will Do

You will know that you have found a legitimate company when they focus on removing information that is unfair, misleading or false. 

A great credit repair company will place you with a personal representative to assist you with your case and individual plan.

During your initial consultation the company will explain how it plans to fix your credit and essentially walk you through everything.

While there is no way to undo the past, a good credit repair company will help you eliminate errors and point your credit in the right direction. 

Quick Note:

You should do as much research and read all reviews before deciding on a credit repair company.  You should base your decision on what's offered and your specific situation.

The Top Credit Repair Companies

Below is a quick list of the top 5 credit repair companies, as you can see their price ranges depending on the company.

These companies aren't ranked by price, but by overall value. 

Overall Ranking


6 Month Cost

Avg. Monthly Cost

Learn More


Credit Saint 




Sky Blue




Credit Pros







Lexington Law



You should probably check out our review of the best credit repair companies as well for more detailed information.

Or visit our review of the best credit repair companies of 2021

What Are My Rights For Credit Repair?

Within the Credit Repair Organizations Act (CROA), it's illegal for a credit repair services company to lie about what they can offer. 

These companies are also prohibited from making you pay before services are rendered.

And guess what: 

Be Careful!

Make sure you are very well prepared before you start doing any outreach to a creditor you owe.

As long as it hasn't been longer than 3 days, you can cancel your contract if you feel uncomfortable. 

Last but not least, the company has to provide you a copy of your Consumer Credit File Rights or (CCFR) before they offer you a contract. 


If your rights have been violated, you can file a complaint with your State Attorney General's office by visiting the FTC website or by calling 877-FTC-HELP.

Or visit our review of the best credit repair companies of 2021

Taking Action

Now that you know credit repair is legit and legal, it’s time to figure out your credit repair plan. You can either repair it yourself or get a credit repair company to assist you.

The most important thing you can do now is making a decision on how to repair your credit, don’t just wait around for it to fix itself.

There are a ton of excellent credit repair companies, and we have reviewed the best ones, so check out the reviews and get your credit journey started today.

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