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US CROA Laws: Written Contracts, Fees, Disclosure, Reporting & More

By Dan Rose
Updated on April 7, 2024
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Understanding federal CROA laws will be your first step to getting a grasp on your credit score. Below is a brief synopsis which will give you the foundation you need to understand these laws. After that point, you may want to retain a credit report attorney to help you navigate the legal maze which is required to actually improve your credit score once and for all.

Credit repair involves the process of improving an individual’s creditworthiness and fixing any inaccuracies or negative information on their credit reports. There are laws in place to regulate the credit repair industry and protect consumers. One significant law that governs credit repair is the Credit Repair Organizations Act (CROA) in the United States. Here are key aspects of credit repair law, particularly focusing on CROA:

  1. Credit Repair Organizations Act (CROA):
    • Enacted in 1996, CROA is a federal law that regulates credit repair services and protects consumers.
    • Prohibits deceptive practices and ensures transparency in credit repair services.
  2. Prohibited Practices under CROA:
    • Credit repair companies are prohibited from making false claims about their ability to remove accurate and negative information from credit reports.
    • Charging fees before services are provided is not allowed.
    • Ensures that consumers have the right to cancel services within a three-day cooling-off period.
  3. Written Contracts:
    • CROA mandates that credit repair companies provide consumers with a written contract outlining the services to be performed, the duration of the contract, and the total cost.
    • Consumers have the right to cancel the contract within three business days without any penalty.
  4. Fee Structure:
    • Credit repair organizations cannot charge fees upfront. They can only collect fees for services after they have been performed.
    • Fees must be reasonable and cannot be charged before the services are rendered.
  5. Disclosure Requirements:
    • Credit repair organizations are required to provide consumers with a disclosure statement explaining their rights under CROA.
    • The disclosure must include information about the consumer’s right to dispute inaccurate information on their own.
  6. Reporting to Credit Bureaus:
    • Credit repair companies must not make false statements to creditors or credit bureaus with the intent to alter a consumer’s credit report.
  7. State Regulations:
    • In addition to federal laws like CROA, many states have their own regulations governing credit repair services.
  8. Consumer Rights:
    • Consumers have the right to dispute inaccurate information on their credit reports directly with the credit bureaus.
    • They can obtain a free copy of their credit report annually from each of the major credit reporting agencies.

It’s important for consumers to be aware of their rights under credit repair laws and to exercise caution when engaging with credit repair services. While legitimate credit repair services can provide assistance in improving credit, consumers should be wary of companies that make unrealistic promises or charge high fees upfront. Additionally, consumers have the right to dispute inaccuracies on their own without the need for third-party services.


Consumer laws can be complex, contact that the experts at Aronov Law NY now for a full understanding of how CROA laws can help you get your life back on track.

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