Key takeaways

  • Consumers with heavy debt loads or lower credit scores are targets for debt relief and credit scams.
  • Scammers commonly reach out with promises of results and demand upfront payments.
  • You can protect yourself from scams by researching legitimate debt relief and credit repair options.

The average American has an estimated debt balance of $96,371. Between credit card debt, auto loans and mortgages, Americans are often comfortable with some level of debt. However, the past few decades have also brought steep increases in student loan debt and medical debt, making the amounts owed untenable for many Americans.

The good news is that there are reputable debt relief and credit repair companies that can help. The bad news is that you have to watch out for scammers who claim to offer debt and credit solutions but don’t do anything more than take your money.

Are debt relief programs legitimate?

Legitimate debt relief programs are available to consumers. A reputable debt relief company can help you get control over your debt in three ways:

  • Debt settlement: This involves negotiating with creditors to accept less than the full loan amount.
  • Debt consolidation: Debt consolidation is paying off multiple existing debts by taking on one large, often lower-interest loan and a single monthly payment.
  • Debt management: Debt management usually involves creating a structured plan to pay off debt.

Debt relief programs often use one or more of these methods to help you navigate your debt.

Are credit repair programs legit?

There are also legitimate credit repair companies available to help you fix your credit score. If you have incorrect, outdated or misleading information on your credit report, for example, you can hire a credit repair company to work with the creditors and credit bureaus on your behalf. Correcting your credit report can potentially increase your credit score.

However, it is worth noting that you can repair your credit on your own. Consumers are free to contact creditors and the credit bureaus directly to request corrections.

What are the signs of a debt relief scam or credit repair scam?

The scams to avoid when looking for a credit counselor or debt relief program typically center around companies promising results in exchange for upfront payments. Once you send your payment, you either don’t hear from the scammer again, or they continue to request more money for ongoing services they don’t actually provide.

The scammer contacts you first

You may be the recipient of a debt or credit scam if someone reaches out to you first. Scammers may reach out via email, text, phone call or social media messaging.

The Federal Trade Commission (FTC) enforces the Telemarketing Sales Rule, which outlines rules and regulations for contacting prospective clients over the phone. Telemarketers must limit calls to certain hours and cannot contact people on the Do Not Call Registry. If you feel a telemarketer is violating these regulations, you can contact the FTC.

The company requires upfront payment

Debt relief and credit scams usually require payment upfront. A legitimate debt relief company will only invoice after completing a service (often charging a percentage of the debt relief amount).

A legitimate credit repair company typically charges a monthly fee. They may charge a “first work fee” to cover their time reviewing your credit report and determining a course of action. However, this first work fee should not be exorbitant — it’s often similar to the amount of the monthly service charge.

The company promises results

There are no guarantees that debt can be lowered or credit scores will improve. So, you should avoid any company that promises a credit score increase or debt settlement.

How can you avoid debt relief and credit scams?

What can you do to protect yourself from credit repair and debt relief scams? Follow these tips:

  • Consider doing it yourself. You can manage your own debt and fix your own credit. This may be a solid option for those looking to take control of their finances, as you’ll learn a lot by going through the process yourself.
  • Research companies. If you need help with your credit or managing your debt, research reputable debt relief companies and credit counselors. You can check watchdog and review sites to determine if a company is legit and has satisfied customers.
  • Question upfront fees. A good debt relief company will only charge you if it helps you with your debt. Credit repair companies may have a start fee or first work fee. Make sure you understand what those fees cover before signing up for service.
  • Know your rights. Debt relief and credit repair companies cannot harass you with phone calls to get your business. If telemarketers are calling at odd hours or continue to contact you after you have expressly told them not to call you again, you can report them to the FTC.

Which debt relief and credit repair companies are legitimate?

Here are some of the best debt relief companies to consider:

  • Accredited Debt Relief: With over 300,000 enrolled clients, Accredited Debt Relief has spent the last 13 years servicing over $1 billion in debt. The educational tools, financial resources and money-back guarantee set it apart from similar debt relief companies.
  • Freedom Debt Relief: Since 2002, Freedom Debt Relief has helped settle over $18 billion in debt. With more than 1,600 employees and over 350 dedicated customer service representatives, Freedom offers 24/7 customer service.
  • JG Wentworth: Founded in 1991, JG Wentworth is among the most well-established debt relief companies with one of the most recognizable names in the market. The company reports that the average JG Wentworth client saves 51% on their total debt balance by enrolling in its debt relief program.
  • National Debt Relief: Since 2009, National Debt Relief has helped resolve over $10 billion in unsecured debt for over 600,000 customers. This nationwide servicer, based in New York, offers multiple perks, including individualized assistance and scholarship opportunities.
  • Pacific Debt Relief: Pacific Debt Relief has spent 20 years building a reputation for strong customer service. Pacific Debt is accredited by the Consumer Debt Relief Initiative and, while it can help with multiple debt types, it specializes in credit card debt.

Here are some of the best credit repair companies to consider:

  • is among the most affordable credit repair companies. With multiple packages priced below $100 per month, customers can choose a plan that meets their needs and their budget. Assistance is also available in Spanish, making this a good option for native Spanish speakers.
  • Credit Saint: Credit Saint has established a reputation for exceptional customer service and strong results. You’ll find lots of rave reviews from happy clients online, and the money-back guarantee offers additional assurance for new customers.
  • Lexington Law: There’s no need to choose among different service packages at different price points. With Lexington Law, there is just one straightforward credit repair package available. It’s easy to sign up and there are lots of free resources to help you fix and maintain your credit score over time.
  • Sky Blue Credit: Established in 1989, Sky Blue is one of the longest-standing credit repair companies. The reasonably-priced Full Service package provides exceptional value by packing in the services. And with a unique pricing structure for couples, you and your partner can improve your credit together.
  • The Credit Pros: If you prefer a wide range of services, The Credit Pros may be a good option for you. Depending on the package, you can get unique services, like dark web monitoring, letters of reference and even a $5,000 loan to help you build a good track record of on-time payments.

The bottom line

If you’re struggling with debt and/or credit issues, you have options for improving your financial situation. You can, for example, use a debt payoff calculator to create your own debt payment plan. Or you can contact the credit bureaus to dispute an error on your credit report. If you don’t have the time or desire to fix your finances yourself, you can seek out legitimate debt relief and credit repair services.

What you should not do is fall for a debt relief or credit repair scam. Don’t accept unsolicited offers over the phone, through email or via social media messaging. And don’t send large upfront payments to companies that promise to deliver results. When in doubt, check with the BBB and other reputable review sites to see what customers have to say about their experience with the companies you’re considering.