Credit repair scams: red flags (and why CPNs are illegal)
Some "credit repair" companies take money and do nothing, or push you into crimes. Know the red flags.
Red flags
- Asks you to pay before doing any work (illegal under the federal Credit Repair Organizations Act)
- Promises to remove accurate negative information or guarantees a score
- Tells you not to contact the credit bureaus yourself
- Tells you to dispute accurate items as "not mine"
- Offers a "CPN" (credit privacy number) or a "new credit identity"
- Won't give you a written contract or your 3-day cancel right
CPNs are a crime
A CPN is often a stolen Social Security number, frequently a child's. Using one on a credit application can be a federal crime. No real company will sell you one.
State rules
Many states require credit repair companies to register with the state and post a bond. In California, that's the Department of Justice and a $100,000 bond. Ask any company for its registration number in your state.
You can do it yourself
Everything a legitimate company can do, you can do for free: get your reports, dispute errors, and ask collectors for proof. Our free letter builder helps.
Report a scam
ReportFraud.ftc.gov and the your state attorney general.
Questions
Is credit repair legal?
Yes, when the company follows the rules: no fees before work is done, a written contract, a 3-day cancel right, no false promises, and in many states, state registration and a bond.
General information, not legal advice. Sources: CFPB, FTC. Checked November 2026.