Looking to Improve Your Credit Report? Avoid These Scams.
Imagine trusting a company with your Social Security number and other sensitive data, paying them to repair a credit report issue, and seeing what appears to be the desired results — only to learn it was all a scam. That's what happened to a Reddit user who wanted to clean up some dings on his credit report.
"I have text messages and emails from this guy that can back up everything that we talked about in terms of the service," wrote the user in a Reddit forum for legal advice.1 About 45 days after paying the scammer $500, he recalled, "everything on my credit was deleted."
But the good news was short-lived. Three months later, a confusing letter from TransUnion led him to the truth: The scammer had filed an FTC complaint falsely claiming that the Reddit user was a victim of identity theft.
The user wrote: "These accounts were removed in a fraudulent way, and I did not know. What's about to happen to me?"
That worried victim isn't alone. The Federal Trade Commission (FTC) issued a consumer alert in December 2025, warning readers about similar illegal credit repair scams.2 If you're looking for ways to improve your credit report, be on the lookout for fraud. There are two basic ways to improve your credit report:
- Diligently work to pay off or otherwise resolve financial accounts in negative standing
- File a dispute to remove errors or fraud
Here are a few of the ways scammers try to take advantage of those working to boost their credit.
1. Advance Fee Scams
Advance fee scams are some of the oldest in the book: A scammer promises to perform a service after the victim pays in advance. Then the scammer takes the money and disappears. In this version, the scam is a promise to improve your credit report. In 2024, the Consumer Financial Protection Bureau announced it would distribute $1.8 billion to 4.3 million consumers harmed by a credit repair advance fee scam.3
To avoid this scam: Never pay for credit repair services in advance. By law, legitimate credit repair companies cannot make you pay until their services are complete.
2. Scams To Remove Accurate But Negative Data
Scam-type credit repair offers frequently claim they can remove a default or other negative information from a credit report, even if it's accurate.4 Removing correct information from a credit report is not legal. A process does exist for consumers – or a legitimate credit repair company representing them – to remove mistakes or fraud. Those processes are easy and free (learn more about how to dispute a mistake or fraud on your credit report), so few people benefit from paying someone else to do them.
Scammers will use illegal methods, such as filing a false identity theft report, as in the Reddit user's story above, to prompt the credit reporting bureaus to remove information from a report. This makes the victim temporarily think their credit report has been scrubbed, so they pay the scammer before they realize something illegal has occurred.
To avoid this scam: Do not trust a claim to remove something negative but true from your credit report. It simply cannot be done legally.
3. Advice To Take Illegal Actions
Some scammers try to keep their hands clean by simply advising consumers do something illegal to improve their credit report.2 Social media influencers attempt to get lots of views by promising people credit repair hacks. In January 2025, the FTC warned readers about influencers advising audiences to file false identity theft reports to remove unwanted information from their credit reports.5 This is illegal, as is knowingly filing false disputes, another piece of illegal advice scammers circulate.
In 2024, the CFPB announced it would distribute $1.8 billion to 4.3 million consumers harmed by a credit repair advance fee scam.
To avoid this scam: Don't believe any so-called "easy tips" or "hacks" to improve your credit. If it sounds underhanded, it's very likely illegal. Report influencers who circulate illegal tips on the social media platform. If you take an illegal action, you may be subject to persecution.6
4. New Identity Schemes
Some scam companies sell victims on the idea that they can leave a bad credit report behind entirely by creating a new credit identity. They create and sell credit privacy numbers or CPNs, which are falsified identity numbers meant to be used in place of a Social Security number on a credit application to hide someone's credit history.7 This is illegal and can land the CPN user in legal trouble.
To avoid this scam: Do not believe a scammer's claims that CPNs are legal according to the Privacy Act of 1974. According to TransUnion, using anything other than government-issued identification on a credit application constitutes fraud and a Social Security scam.7
Safely Improving Your Credit Report
Legitimate companies that offer credit repair services do exist, but since most actions required to legally improve a credit report are free, these companies are regulated to protect consumers. In addition to only charging customers after performing services, these companies are obligated to:6
- Inform customers of their legal rights and what they can do to repair their credit on their own.
- Provide customers with a written contract that includes key company details, as well as three days to consider the contract.
The good news when it comes to legitimate ways to improve your credit report and score is that almost all the techniques are free for consumers to do on their own — the bad news is that the process simply takes time. There are two basic ways to improve your credit report:
- Identify mistakes or fraudulent information. File a dispute for any inaccurate information with each of the credit bureaus:
- Pay off or otherwise resolve the negative credit issues on your credit report.
Both options take time, and even resolved negative records do stay on your credit report for years before falling off. While scammers try to take advantage of people's impatience, savvy consumers can learn "How to Improve Your Credit Score" to do it themselves.
If you believe you've been defrauded by a credit repair scam, report the incident to the FBI's Internet Crime Complaint Center (IC3).11 You can also follow the steps outlined in our guide, “What to Do if You Are a Victim of Fraud,” to protect your credit and financial accounts.
-
5 Ways to Protect Yourself From Identity Theft
Identity thieves can damage your credit, steal your money, and disrupt your life. Here are ways to protect yourself against ID theft.
-
Understanding Account Takeover Scams
Account takeover is when fraudsters take over one or more of your financial accounts.
Important disclosure information
This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.
- Reddit user Icy-Steak8047, "So what's going to happen to me in this situation?" Reddit r/legaladvice. Published March 26, 2023. Accessed February 22, 2026. Back
- Federal Trade Commission, "Looking to fix your credit? An illegal credit repair scam isn’t the answer," FTC Consumer Alerts. Published December 29, 2025. Accessed February 22, 2026. Back
- Consumer Finance Protection Bureau, "CFPB Announces Return of $1.8 Billion in Illegal Junk Fees to 4.3 Million Americans Harmed in Massive Credit Repair Scheme," CFPB Newsroom. Published December 5, 2024. Accessed February 22, 2026. Back
- Federal Trade Commission, "Only scammers say they’ll remove all negative information from your credit report," FTC Consumer Alerts. Published August 5, 2024. Accessed February 13, 2026. Back
- Federal Trade Commission, "Influencers are pushing this illegal trick to “fix” your credit report," FTC Consumer Alerts. Published January 5, 2026. Accessed February 22, 2026. Back
- North Carolina Attorney General's Office. "Credit Repair Scams." Accessed February 22, 2026. Back
- TransUnion, "What Is a Credit Privacy Number (CPN)? How to Avoid Them and Build Your Credit the Right Way. Published January 19, 2024. Accessed February 22, 2026. Back
- Equifax, "Dispute information on your Equifax credit report," accessed August 21, 2024. Back
- Experian, "Dispute online," accessed February 22, 2026. Back
- TransUnion.com, "Credit Dispute," accessed February 22, 2026. Back
- FBI, "Internet Crime Complaint Center (IC3)," accessed February 22, 2026. Back