Glossary term
CROA (Credit Repair Organizations Act)
Short answer
The Credit Repair Organizations Act is the federal law that regulates companies selling credit repair services. It bans charging fees before services are fully performed, requires a written contract with specific disclosures, and gives consumers at least three days to cancel.
Why it matters
CROA is your scam detector. It prohibits credit repair companies from making false or misleading claims, advising customers to lie to bureaus, or promising to remove accurate information — no company can lawfully do that, whatever the sales pitch says. It also means an upfront-fee demand is more than a bad deal; it's a legal violation. Anything a credit repair company can lawfully do, like disputing inaccurate items, you can do yourself for free — CROA exists because so many companies charged for the impossible. Violations can support lawsuits, including by state attorneys general and the FTC.
Example
A company offers to "wipe" Andre's accurate charge-off for $500 paid today. That single pitch stacks two CROA problems: an advance fee and a promise no one can keep. Andre keeps his $500, disputes the one item on his report that's genuinely wrong himself, and reports the company to the FTC and his state attorney general.
Terms used on this page
Guides that use this term
- Credit Repair Companies: What to Know Before You PayWhat credit repair companies can legally charge, what the Credit Repair Organizations Act requires, red flags, and free alternatives to compare first.
- Credit Repair Scams: Red Flags and How to Report ThemThe red flags of credit repair scams — advance fees, guaranteed deletions, CPN schemes — plus how to report them to the FTC, CFPB, and your state.
- What Credit Repair Can and Cannot DoA plain-English map of what credit repair can fix — errors, mixed files, identity theft, outdated items — and what no one can legally remove or guarantee.
Sources
This page is based on the following official and authoritative sources. Always check the source itself for the most current rules.
Educational information — not advice
This page provides general educational information about credit, debt, and consumer protections. It is not legal advice, financial advice, or credit repair services, and reading it does not create any professional relationship. Laws, procedures, deadlines, and dollar amounts vary by state and change over time.
For advice about your specific situation, consult a licensed attorney or qualified financial professional. See our full disclaimer.