BBB Tip: Credit Repair and Debt Relief Scams

Overwhelming debt can make you desperate and reckless. Don't fall for scams promising you impossible services to help with your credit and debt problems.

poor credit reportCredit Repair and Debt Relief Scams

In this con, scammers promise to repair your credit or eliminate your debt… for a fee. They entice you with guarantees, such as a particular credit score increase or debt forgiveness, and charge upfront for their “services.” If you pay up, scammers either take the money and disappear, or fail to deliver all they promised.

How the Scam Works:

Scammers offering credit repair and debt relief services reach you in a variety of ways: online advertising, social media, or even calling directly. But no matter how they find you, their message is the same: For an upfront fee they can “guarantee” to raise your credit score and/or reduce or eliminate your debt.

These companies frequently promise – and charge for – impossible services. This includes removing past credit mistakes, such as late payments or a bankruptcy, from your credit report. They may offer to give you a new "credit identity” or negotiate with the lender or credit card company to completely eliminate the debt.

How to Spot This Scam:  

  • Advance fees are a concern. Not all businesses promising to help you repair bad credit are scams, but if you are asked to pay in advance, that’s a big red flag. In both the U.S. and Canada, credit repair and debt relief companies can only collect their fee after they perform the services promised.

  • Do not believe guarantees. Nobody can guarantee to make debt go away or improve your credit score. In fact, they can’t promise you anything before they have even reviewed your personal financial situation. 
  • Beware the big promise. Other red flags are big promises, such as removing negative information from your credit report, or urging you to get a new identity or apply for an Employer Identification Number to use instead of your Social Security number (that’s a crime, by the way). No contract or one that is vague is another warning sign.

To report a scam, go to BBB Scam Tracker.

To learn how to protect yourself, go to “10 Steps to Avoid Scams”.

Last Reviewed: March 24, 2017