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March 8, 2024

Avoid These Credit Repair Scams: “Credit Cleaning” is Fraud

If you’re looking to build (or rebuild) your credit history, you might be on the lookout for advice about how to improve your credit score. You may even seek the paid services of a credit repair company. While there are several ways to improve your credit score, repairing damaged credit takes time and consistency, so a company advertising a quick fix to your credit score may be looking to take advantage. Watch out for credit repair scams.

“New credit identity”? That’s fraud.

If a credit repair service operates by helping you hide poor credit history or past negative credit events, such as bankruptcy, it might be a credit repair scam based on fraud and identity theft.

Here’s how the credit repair scam goes

The company claims they can wipe out your past mistakes, and they may even lie and tell you it’s aboveboard and legal. They say they’ll provide you with a nine-digit number, a Credit Privacy Number (CPN), that will function as a new Social Security number to help you hide your credit history. Or, they’ll have you apply for a new Employer Identification Number with the IRS and tell you to use that or the CPN when applying for new credit. So, what’s really happening? Identity theft.

These companies are selling stolen Social Security numbers, often stolen from children, according to the FTC.* When you use a stolen number, you’d be involved in identity theft, and any attempt to misrepresent your credit history or provide untrue information on credit applications is fraud. By partaking in such activities, you risk legal repercussions.

Watch out for credit repair scam red flags.

At this point, you might be wondering, “How can I tell if credit repair services are real or a scam?”

Here are a few ways to spot a fraudulent credit repair company:

  • They claim to provide an overnight boost to your credit score, especially if they ask you to pay for it. Credit scores cannot be “repaired” or “boosted” overnight.
  • They tell you to dispute accurate and true information on your credit report.
  • They advise you not to contact the credit reporting companies or your financial institution directly.
  • They advise you to give false information on loan or credit applications.
  • They neglect to explain your legal rights to you when describing their services.
  • They say they’ll provide a new Social Security number, CPN or another nine-digit identification number to use instead of your own Social Security number.

When it comes to credit repair, the Credit Repair Organization Act protects consumers seeking credit repair services. It is illegal for credit repair companies to lie or misrepresent the scope of their services or to charge you before they help you.

Know your credit rights.

Credit repair companies must explain your legal rights in a written contract that details:

  • The services they’ll perform.
  • Your three-day right to cancel without any charge (and give you a written cancellation form).
  • How long it will take to get results.
  • The total cost you’ll pay.
  • Any results they guarantee.

Do you believe you’ve been a victim of credit repair fraud or a credit repair scam? File a complaint online at or call 1.877.FTC.HELP.

*Fixing Your Credit FAQs. Accessed February 9, 2024.

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