Help Desk FAQ



Can credit repair organizations collect fees upfront?

Not legally. Under the Credit Repair Organizations Act (CROA), the credit repair organizations (CRO) must fully perform the promised service before receiving any payment. CROs must provide you with a written contract with the following provisions:

  • a detailed description of the services provided
  • performance time
  • payment terms, including the total amount
  • any and all guarantees
  • date or length of period service will be completed
  • CRO’s name and principal business address

You must receive a copy of the “Consumer Credit File Rights Under State and Federal Law” before you sign anything with the CRO. There is a three-day “cooling off” period in which you can cancel the contract without paying any fees.

Ultimately, we would recommend that consumers never pay a company to fix their credit. At best, you will spend hundreds (or perhaps thousands) of dollars on something you can do yourself for free. Other times, the company will simply take your money and disappear. Some credit repair outfits even encourage unsuspecting consumers to engage in illegal activities such as “file segregation” (manufacturing a bogus identity to set up additional credit files), which can result in the consumer facing criminal penalties.

If you believe that a CRO has violated the law, you can file a complaint with your state Attorney General and the Federal Trade Commission. You can also file an action against the CRO for actual damages, punitive damages, costs, and attorneys’ fees for violations of the CROA.

Click here for more information on the CROA. To find more information on how to repair credit yourself, go to the discussion forums at and

To learn more about reestablishing your credit, see our Rebuilding Good Credit module.



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Consumer Help Desk