A written contract and a rights disclosure come first
15 U.S.C. § 1679c
In plain words
Before you sign, a credit repair company must give you a separate written statement titled "Consumer Credit File Rights Under State and Federal Law." No service can be provided without a signed, dated written contract stating the total cost, a detailed description of the services, any guarantees, how long it will take, the company's address, and a bold cancellation notice next to your signature. Any waiver of these rights is void.
Who is protected
Anyone who pays a company (other than a bona fide 501(c)(3) nonprofit, a creditor restructuring its own debt, or a bank or credit union) to improve their credit record or advise them about it.
When it applies
It has no special conditions: it protects everyone it names.
Check whether it applies to youWhat you can do
Check a credit repair contract before signing
Make sure you received the separate rights statement, the total cost, and two cancellation forms. If not, do not sign — and report the company.
Honest limits
- These rules protect you when you hire a company; they do not apply to what you do on your own.
The law
- Federal lawCROA — required disclosure statement
15 U.S.C. § 1679c
What it says: The exact "Consumer Credit File Rights" statement, given separately before any contract, with a signed copy kept 2 years.
Read the official texthttps://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section1679c&num=0&edition=prelim - Federal lawCROA — contract requirements
15 U.S.C. § 1679d
What it says: Written, dated, signed contract with payment terms, services, guarantees, time estimate, address, and bold cancellation notice.
Read the official texthttps://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section1679d&num=0&edition=prelim - Federal lawCROA — waivers and non-complying contracts void
15 U.S.C. § 1679f
What it says: Waivers are void and a non-complying contract is void and unenforceable.
Read the official texthttps://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title15-section1679f&num=0&edition=prelim
Court cases
- Partial winSame topicTaggart v. Lorenzen
Taggart v. Lorenzen, 587 U.S. 554 (2019)
a creditor may be held in civil contempt for violating a bankruptcy discharge order when there is no fair ground of doubt that the order barred its conduct
- Homeowner wonSame topicJerman v. Carlisle, McNellie, Rini, Kramer & Ulrich, L.P.A.
Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich, L.P.A., 559 U.S. 573 (2010)
the FDCPA's bona fide error defense does not excuse a debt collector's incorrect interpretation of what the Act requires
- Homeowner wonSame topicKaltenbach v. Richards
Kaltenbach v. Richards, 464 F.3d 524 (5th Cir. 2006)
a person who meets the FDCPA's general definition of debt collector is subject to the whole Act even while enforcing a security interest
- Homeowner wonSame topicHeintz v. Jenkins
Heintz v. Jenkins, 514 U.S. 291 (1995)
the FDCPA applies to lawyers who regularly collect consumer debts, even through litigation
- Homeowner lostSame topicObduskey v. McCarthy & Holthus LLP
Obduskey v. McCarthy & Holthus LLP, 586 U.S. 466 (2019)
a business engaged only in non-judicial foreclosure is not a debt collector under the FDCPA, apart from the provision barring threats to take property without a present right
- Homeowner lostSame topicMidland Funding, LLC v. Johnson
Midland Funding, LLC v. Johnson, 581 U.S. 224 (2017)
filing an obviously time-barred proof of claim in bankruptcy does not violate the FDCPA
Related rights
A credit repair company cannot charge you before the work is done
15 U.S.C. § 1679b(b)
Federal law bans credit repair companies from charging or taking any money for a service before that service is fully performed. A company that bills you up front, charges a "setup" or "first work" fee, or charges a monthly fee for work it has not done yet is breaking the law.
Read this rightCancel a credit repair contract within 3 business days
15 U.S.C. § 1679e
You can cancel any credit repair contract, for any reason and without penalty, until midnight of the third business day after you sign it. The company must give you a "Notice of Cancellation" form in duplicate and may not start work during those 3 days. Some states give you 5 days.
Read this rightYou can recover damages when the FCRA is broken
15 U.S.C. § 1681n
A credit bureau or a company that reports to one that willfully breaks the FCRA owes your actual damages or statutory damages of $100 to $1,000, possible punitive damages, and your costs and attorney's fees. A negligent violation owes actual damages and fees. The claim must be filed within 2 years of discovering the violation and no more than 5 years after it.
Read this rightA collection or charge-off must carry its real delinquency date
15 U.S.C. § 1681s-2(a)(5)(A)
A company that reports an account placed for collection or charged off must tell the credit bureau the month and year the delinquency began, within 90 days. That date sets when the item must come off your report, and it does not change when the debt is sold.
Read this rightDispute errors on your credit report
15 U.S.C. § 1681i(a)(1)(A)
If your credit report has something wrong or incomplete — like a payment reported late that you made on time — you can dispute it with the credit bureau for free. The bureau must investigate, usually within 30 days, and fix or delete information it cannot verify.
Read this rightPlace a free fraud alert
15 U.S.C. § 1681c-1(a)
If you suspect in good faith that you are, or are about to become, a victim of fraud or identity theft, you can ask one nationwide bureau to place a fraud alert for at least 1 year; it must pass the alert to the other two. Identity theft victims with an identity theft report can get an extended alert for 7 years. Either alert also entitles you to free copies of your file.
Read this right