How to spot a credit repair scam

The warning signs, your rights under federal law, and why a "new credit identity" is illegal.

Warning signs

Be careful with anyone who guarantees to remove accurate negative items, promises a specific score, tells you not to contact the bureaus yourself, or asks you to dispute information you know is correct.

Your rights

Under the Credit Repair Organizations Act, a credit repair company cannot charge you before it has fully performed the promised services, must give you a written contract, and must let you cancel within three business days.

Never use a "CPN"

Some sellers offer a "credit privacy number" or "new credit identity." Using a number other than your own Social Security number to apply for credit can be a federal crime. Walk away.

What anyone can do for free

You can get your reports free, dispute errors directly with the bureaus, and get help from nonprofit credit counselors. A legitimate service saves time; it cannot do anything you are not allowed to do yourself.