Avoiding Credit Repair Scams – Know the Signs

Struggling with bad credit can be frustrating and overwhelming. So when a company promises to quickly “fix” or “erase” your credit history for a fee, it may sound too good to pass up. Unfortunately, many of these offers are credit repair scams designed to take your money without actually helping your credit.

At American Legal Shield, we believe consumers deserve honest guidance—not false promises. Here’s how to protect yourself from fraudulent credit repair schemes and recognize the red flags before it’s too late.

What Is a Credit Repair Scam?

A credit repair scam is a dishonest business or individual that promises to fix your credit—often for an upfront fee—but fails to deliver real results. In many cases, these companies:

Use illegal or deceptive tactics
Disappear after taking your money
Provide advice that could harm your credit further
Misrepresent your legal rights

Why Are Credit Repair Scams So Dangerous?

These scams don’t just waste your money—they can also make your credit situation worse. If you follow their advice to dispute accurate information or apply for a new identity, you could face:

Lower credit scores
Additional debt
Legal trouble, including fines or criminal charges

Knowing how to identify a scam is the first step toward protecting your credit and your future.

Warning Signs of a Credit Repair Scam

Here are the biggest red flags to watch for when dealing with any credit repair company:

1. They Demand Upfront Payment

Under the Credit Repair Organizations Act (CROA), it is illegal for a credit repair company to charge you before they’ve provided services. If they ask for payment first, walk away.

2. They Promise a Quick Fix

No legitimate company can guarantee fast results. Improving your credit takes time, especially when dealing with accurate negative information.

3. They Say They Can Erase Accurate Information

If a company claims they can remove accurate and timely information—like late payments, foreclosures, or defaults—they’re not being honest. Only incorrect or outdated information can be legally removed.

4. They Ask You to Lie or Create a New Identity

Some scammers may advise you to dispute every item on your report (even if true) or to apply for an Employer Identification Number (EIN) to use as a fake Social Security number. This is fraud and can result in criminal charges.

5. They Don’t Explain Your Rights

Legitimate credit repair services are required to give you a written contract, explain your rights under the law, and allow you to cancel within three business days.

6. They Don’t Provide a Physical Address or Contact Info

Scam companies often operate anonymously or only online. A lack of a physical location or real phone number is a major red flag.

What Are Your Legal Rights?

You have powerful rights under federal law to protect yourself from dishonest credit repair services. Under the CROA, you’re entitled to:

A written contract explaining the terms and your rights
A 3-day right to cancel without any fee
No payment required before services are completed
Protection from false or misleading claims

If your rights are violated, you can take legal action and may be entitled to damages.

How to Safely Rebuild Your Credit

If you’re trying to improve your credit score, avoid shortcuts and focus on legitimate strategies:

Review your credit report from AnnualCreditReport.com
Dispute only inaccurate or outdated information
Pay bills on time and reduce debt balances
Avoid new credit applications unless necessary
Consider working with a nonprofit credit counseling agency

How American Legal Shield Can Help

If you’ve been targeted by a credit repair scam or have concerns about your rights, American Legal Shield is here to help. Our team can:

Review suspicious credit repair offers
Report fraud to the appropriate agencies
Help you take legal action if you’ve been scammed
Connect you with trusted credit and financial resources

Contact Us Today
Phone: (888) 508-6205
Email: [email protected]

Final Thoughts

When it comes to your credit, there are no magic fixes or overnight solutions. If a company promises you the impossible, chances are it’s a scam. Protect your credit, your money, and your future by learning to spot the signs and relying only on trusted professionals.

At American Legal Shield, we’re here to empower and protect you every step of the way.