Does Credit Repair Work? [All You Need to Know in 2024]


Did you know that bad credit can prevent you from getting the job you want? It can also make it extremely difficult to get a loan when you need one. Most people want to improve their credit score, but does credit repair work?

In this short piece, we’ll see what credit repair companies can do for you and what their specific operating methods are. We’ll also give you valuable tips on how to avoid credit repair scams.

Who Can Benefit From Credit Restoration?

Let’s start with the basics. Your credit score is calculated based on several consumer habits that shaped your current financial status. Namely, payment history, debts, missing payments, new credit, and your credit mix impact the figures on your credit reports.

There are two types of credit score calculations – FICO (named after the Fair Isaac Corporation) and VantageScore (created by the three major credit bureaus). Both scores vary from 300 to 850, and both rest on the assumption that a higher score reduces the risk for lenders. In other words, such a score guarantees that you will be able to pay off your debts.

Here is a breakdown of the FICO score, which shows when it is crucial to start thinking about credit restoration:

Credit score range Meaning
300-579 Poor credit score
580-669 Fair credit score
670-739 Good credit score
740-799 Very good credit score
800-850 Exceptional credit score

Basically, everyone whose FICO score is below 740 should consider boosting the figures. In contrast, people with very good and exceptional scores should do their best to maintain them.

Did you know: lets you download credit reports from three credit bureaus for free on a weekly basis as part of the COVID-19 relief package. The bureaus in question are Experian, Equifax, and TransUnion. Also, be sure to check our article on how to read a credit report after obtaining your records.

Do Credit Repair Companies Work?

Since you are probably reading this to find out how to fix your credit score, we’ll focus on explaining all the ambiguities related to the credit repair industry.

So, first and foremost, does credit repair actually work? Many of the scary stories and reviews online are not that trustworthy. Bear in mind the following facts:

  • Firstly, your consumer rights are granted and protected under the Credit Repair Organizations Act (CROA). Specifically, CROA prohibits false advertising, charging upfront fees, and spells out your cancellation rights.
  • Secondly, you can file a complaint about fraud to the Consumer Financial Protection Bureau (CFPB). The CFPB also deals with complaints about customer service, confusing and missing disclosures, and excessive fees.

Naturally, this doesn’t mean that there aren’t a lot of frauds and illegal companies offering credit repair. But there are legal means to fight illegitimate businesses within the credit repair industry while, at the same time, respecting legitimate ones. Check our guide to the most trusted credit repair companies and see the difference between the companies for yourself, especially since we included both market veterans (Credit Saint & Sky Blue Credit) and novices (Pyramid Credit Repair).

Finally, are credit repair companies worth it? Yes. The typical score gain through credit repair services is from 75 to 149. However, don’t expect that you will see the results right away. On the contrary, at least three months of services are needed for any noticeable change. This may mean that credit repair costs will be substantial.

Did you know: As of 2021, there are more than 69,000 credit repair companies in the United States. The states with the largest number of such companies are Florida, California, and New York. Interestingly enough, two cities in Florida, namely The Villages and Sun City Center, count among those with the highest median credit score.

What Do Credit Repair Companies Do?

According to the Federal Trade Commission (FTC), a credit repair company can’t do anything for you besides what you can do for yourself. Still, although fixing credit by yourself is undoubtedly a less costly option, it will cost you a lot of your time. In addition, experts and advisors working in a credit repair company may help you achieve the desired figures on your credit report faster. They are also fluent in the legal and financial terms that you may need to understand in order to dispute any errors on your report efficiently.

Some of the most common ways for credit repair companies to clean credit reports from erroneous information are the following:

  • Contacting each credit bureau to dispute errors
  • When they receive answers from the credit bureaus, they send repeated demands for them to remove information that negatively impacts your credit score
  • Proceeding with the process for as long as there are negative items on your credit report

Of course, not all negative items can be removed. For instance, in the case of bankruptcy, the credit repair process can last from 12 to 18 months. Also, here are some additional services they can provide you with:

  • Sending cease-and-desist letters
  • Sending debt validation letters
  • Drafting and sending goodwill letters
  • Protection from identity theft
  • Credit monitoring
  • FICO score tracking
Did you know: A CreditKnocks survey showed that 48% of the participants reported an increase of their credit score by more than 100 points while paying credit repair services for six months. Nonetheless, 35% of them spent over $750 for such services. Unfortunately, 44.9% of all the participants claimed that billing didn’t proceed per contract.

Key Takeaways

Does credit repair work at all? Those with a poor credit score can benefit from credit repair services the most. But there is room for improvement even when one has fair or good credit scores.
You can either begin the long process of improving your credit by yourself or a credit repair company can do that on your behalf.
Are credit repair companies legit? Most of them are respectable businesses, although you should be careful as there are fraudulent businesses as well.
On average, it will take you from 3 to 6 months to boost your credit score by roughly 100 points. Of course, this depends on the severity of your financial situation and the amount of erroneous information that can be disputed and removed from your credit report.

How to Avoid Credit Repair Scams

So far we’ve covered the details pertaining to the way credit repair companies operate and whether they are worth your money. Finally, here are some tips to keep you safe from illegitimate companies promising to provide you with clean credit reports.

Avoid credit repair firms that:

Haven’t Provided You With a Copy of the Consumer Credit File Rights Under State and Federal Law

This is the first red flag to notice. Suppose you don’t get a hold of this document. In that case, the company wants you to remain oblivious about your rights under state and federal laws. This, in turn, allows the company to take advantage of you and your wallet.

Haven’t Provided You With a Copy of the Contract

Should it happen that you don’t get a copy of the contract, feel entirely entitled to ask for it. If the company representatives still hesitate to provide you with the official agreement, simply leave the premises.

Ask You to Create a New Identity

When strange offers like this one pop up, it is absolutely reasonable to ask yourself, are such credit repair companies legit? When the company expert offers a genius solution to your financial worries that include forging a new identity, run. This is a dangerous scam that may result in identity theft.

Ask for Upfront Fees

Charging in advance is prohibited by the CROA. Hence, if a credit repair firm demands any upfront fees, it’s a definite sign of fraudulent activities.

Promise Guaranteed Removals

Virtually nobody can promise you that they will remove negative items from your credit report since it is up to the credit bureaus whether they will accept the disputes sent on your behalf. That’s why, when someone guarantees that they can remove items from your credit report, your hunch is right if that sounds too good to be true.

Don’t Offer Estimates on How Long It Will Take

Real experts will suggest a realistic time frame when you could expect an improvement in your credit score. If a company representative refuses to give you an estimate, try your luck with a different credit repair business.

Don’t Offer Easy Cancellation Options

Should it happen that it is harder to get out of the deal with the credit repair company than out of Alcatraz, you have fallen prey to a scam. Don’t forget that CFPB is always ready to help in such cases. You can file a complaint regarding the credit repair process and expose the fraudulent company.

To sum up, if you have any doubts about the trustworthiness of the credit repair company, you should probably keep searching for legitimate ones. It is of utmost importance to notify CFPB of any fraudulent activity and to be aware of your rights under the CROA.


The credit repair industry can be tricky to navigate, which is why we compiled a list of tips on how to discern shady firms from legit ones, along with a brief guide to credit scores classification and credit fixing services.


Can a credit repair company really help?

Yes. However, this depends on several critical factors: the choice of a legitimate credit repair firm with a proven track record, your patience, and budget, as well as self-discipline. In other words, it is not enough to pay an advisor. Credit repair also requires a radical change in your spending style.

How long does it take to repair credit?

Since credit repair is almost always a long and tedious process, many people are left wondering, does credit repair work? On average, boosting your FICO will take 3 to 6 months. If your goal is to jump from a poor credit score (under 580) to a very good (740-799), however, this could take way longer.

How much does credit repair cost?

Hiring a credit repair company means you’ll probably have to pay a big sum. Most companies charge setup and monthly fees, as well as charges for additional services. A setup fee can be as low as $6 and as high as $199, whereas the monthly fee ranges from $69 to $198.


I learned a lot about finance after working for a digital marketing company specializing in investing and trading stocks, forex, etc. After that, I got exposed to other verticals such as wealth management and personal finance, which further improved my understanding of the financial world.

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