What to Know About the Credit Repair Organizations Act

Credit Repair Organizations Act

In 1996, the Credit Repair Organizations Act (CROA) began protecting U.S. consumers from disreputable credit repair companies.

Imagine being excited about moving to a new city, but shocked when your application for an apartment is denied. Puzzled, you research your credit reports, only to find that someone has stolen your identity and run up thousands of dollars in unpaid debt on a car loan under your name! You’re now left scrambling for a place to live while trying to straighten out your credit. You’re not sure where to turn but you contact a credit repair organization.

These days, thanks to the CROA, you’re much more likely to find a reputable company to help you resolve the damage done to your credit. Before the CROA was enacted, consumers were left on their own trying to figure out which credit repair companies may be on the up-and-up and which ones may just be a sham. The illegitimate organizations often wouldn’t actually help repair credit — and many times simply made things even worse. In this article, we’ll dive deeper into exactly what the CROA is, explore some of our favorite (and compliant) credit repair companies, and look at how to report CROA violations.

Definition | Companies (3) | Report Violations

CROA Prevents Unfair Business Practices in Credit Repair

The 1996 CROA, which is Title IV of the Consumer Credit Protection Act, requires credit repair organizations to communicate honestly with consumers. It’s meant to punish dishonest companies that charge clients for services never rendered and to prevent false promises, such as removing accurate derogatory information from a credit report.

Credit Repair Organizations Act Image

The Act came about as a response to evidence that credit repair organizations were cheating money out of consumers looking to improve their credit scores by claiming to remove negative items from credit reports.

The CROA provides consumers with several legal protections by directing credit repair organizations to adhere to rules, including:

  • Requiring these organizations to provide you all pertinent information about their services and fees before you sign an agreement
  • Telling consumers that credit repair was available without using the organization
  • Preventing upfront charges
  • Requiring the organization show proof of their activities before charging you for those activities

Consumers are also granted cancellation rights they didn’t previously have before CROA, and credit repair companies can only collect payment after services have been rendered.

Top 3 Compliant Credit Repair Companies

Credit repair organizations can help boost your credit score by correcting errors and removing negative items on your credit report that lower your score. The good ones know exactly how and when to communicate with the credit reporting agencies to fix incorrect and incomplete data on your credit reports. The organizations may also offer credit counseling, with an aim to reduce your debt and thereby raise your credit score.

The top three credit repair services, as evaluated by our experts, are as follows:

  • Since 2004, Lexington Law Firm clients saw over 81 million items removed from their credit reports
  • Get started today with a free online credit report consultation
  • Cancel anytime
  • See official site, terms, and details.


Overall Rating

Better Business Bureau In Business Since Monthly Cost Reputation Score
See BBB Listing 2004 $99.95 8/10

Lexington Law clients have seen over 70 million removals on their credit reports since it was founded in 2004.

  • Free online consultation
  • CreditRepair.com members saw over 8.6 million removals on their credit reports since 2012
  • Free access to your credit report summary
  • Three-step plan for checking, challenging and changing your credit report
  • Online tools to help clients track results
  • See official site, terms, and details.


Overall Rating

Better Business Bureau In Business Since Monthly Cost Reputation Score
See BBB Listing 2012 $69.95+ 8/10

CreditRepair.com has helped with over 7.5 million removals on members’ behalf since 2012.

Sky Blue Credit Repair offers quick service by disputing up to 15 items per month, a 90-day money back guarantee, and a low starting cost.

+See More Credit Repair Services

How to Report CROA Violations

If you believe that a credit reporting organization has violated the CROA, contact the Consumer Financial Protection Bureau and submit a complaint.

Consumer Financial Protection Bureau LogoSeveral credit repair organizations are legitimate and do a good job cleaning up mistakes on credit reports. It’s important to use an organization with high ratings and to be aware of your rights under the CROA. If a credit repair organization asks you for an upfront payment or in any other way violates the CROA, report it to the CFPB and find another credit repair service provider.

Photo credits: CreditLoan.com & ConsumerFinance.gov

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