What Is A Credit Sweep And Why Are They Illegal?

If you’re struggling with a low credit score, you may have come across services offering a credit sweep, often billed as a quick fix to erase negative marks from your credit report. But before you jump in, it’s important to understand what a credit sweep actually is and what the consequences could be.

While the idea of wiping away bad credit sounds appealing, disputing accurate marks can lead to serious financial and legal consequences.

What is a credit sweep?

A credit sweep is a method some disreputable credit repair companies use to dispute all negative items on a credit report, often under the premise of improving a person’s credit score quickly. This is typically done by filing false identity theft claims with the credit bureaus.

Here’s how it works:

1. A fraudulent credit repair company or individual disputes all negative accounts on a credit report by filing a fraud affidavit, falsely claiming identity theft.
2. The credit bureaus remove the disputed items (often temporarily) while investigating the claim.
3. The account holder sees a temporary increase in their credit score.
4. If bureaus detect fraud, the individual could face legal repercussions, including fines or imprisonment.

This approach does not erase debt — it only manipulates the reporting system temporarily. Lenders and credit bureaus are catching onto these schemes and have implemented more stringent verification processes.

Are credit sweeps legal?

The short answer: No. Credit sweeps are illegal when used fraudulently to remove accurate negative items.

The Fair Credit Reporting Act (FCRA) requires credit bureaus to remove items tied to proven identity theft. It also states that filing an identity theft report with inaccurate information can lead to legal consequences.

Risks of engaging in a credit sweep include:

• Criminal charges: Filing a false police report or fraud affidavit is a crime that could result in fines or jail time.
• Reinstatement of negative items: Credit bureaus may re-add removed items if fraud is suspected, leaving you with no benefit.
• Difficulty getting credit in the future: Lenders may flag suspicious activity, making it harder to get approved for loans, credit cards or mortgages.
• Financial loss: Many companies charging for credit sweeps scam consumers, taking payments without delivering results.

While it’s legal to dispute inaccurate or fraudulent information on your credit report, lying in an attempt to clear debts simply isn’t worth it. Instead, consider legal and ethical ways to improve your credit score.

How can you properly dispute errors in your credit report?

If you notice incorrect information on your credit report, the best approach is to dispute it through proper channels rather than through a credit sweep.

1. Review your credit report

Download a free copy of your credit reports from each credit bureau (Experian, Equifax and TransUnion) from AnnualCreditReport.com. Review your credit reports carefully, checking for:

• Accounts you didn’t open
• Duplicate accounts
• Incorrect account details (e.g., wrong balances, late payments that were on time)

2. Gather evidence

Before filing a dispute with the credit bureaus, gather evidence to support your claim. This may include bank statements or payment confirmations, letters from lenders stating that the issue was resolved or legitimate identity theft reports, if applicable.

3. File a dispute

You can file a dispute with each credit bureau online, by mail or by phone. Provide clear details and any relevant documentation.

4. Follow up

Credit bureaus have 30 days to investigate a claim. Check your report after this time has passed to see if the corrections were made. If the dispute is denied, you can reapply with more evidence or file a complaint with the Consumer Financial Protection Bureau (CFPB).

What other ways can you repair your credit?

If the negative marks on your credit report are accurate, you won’t be able to remove them until they fall off after seven to 10 years. Consider using these legal, proven methods to improve your credit score. However, recent credit behavior has a big impact.

Pay your bills on time

Your payment history makes up 35 percent of your credit score, so make sure to pay all of your bills on time every month. Set up automatic payments or reminders to help make sure you never miss due dates.

Reduce credit utilization

Credit utilization is the amount of credit you’re currently using compared to your total credit limit. This accounts for 30 percent of your credit score. Try to keep your utilization rate under 30 percent — and ideally under 10 percent — to give your score a boost. You can do this by paying down balances, asking your current lenders to raise your limit or opening new accounts and keeping the balances low.

Negotiate with creditors

If you have past-due accounts, your creditors may be willing to work with you. Contact them to discuss options such as a payment plan to settle overdue balances or ask about hardship options.

If you have a solid payment history and one late payment due to an unusual circumstance, you may consider sending a goodwill letter asking the lender to remove the late payment from your record.

Explore your options for demonstrating responsible credit use

A secured credit card may help if you’re struggling to rebuild your credit. This is a specific type of card that requires a refundable deposit, which acts as collateral for the lender. The amount you deposit typically determines the credit limit.

Taking out a secured card and using it responsibly — for example, making payments on time and keeping balances low — shows lenders you have developed good credit habits. Over time, the lender may return the deposit and upgrade the card to an unsecured credit card, allowing you to continue building credit without needing collateral.

Other options include taking out a credit builder loan, becoming an authorized user on someone else’s credit card, or using a utility or rent reporting service to build your credit.

Work with a reputable credit repair company

Legitimate credit repair companies assist in disputing real errors and providing personalized financial guidance. Before hiring a company, take the time to research its reputation, ensuring it has strong reviews and no history of legal violations.

The bottom line

A credit sweep might seem like a quick fix, but it’s illegal and ineffective. Instead of taking a chance, focus on legal credit repair methods like disputing inaccuracies, paying bills on time and reducing credit utilization. These strategies provide lasting financial stability and improve your credit the right way.

Frequently asked questions

• How long does it take to repair credit legally?
  

  It depends on your situation. Removing errors can take some time, and improving your score with better financial habits can vary with how long it takes. It depends partly on why your score was low.

• Is it worth paying someone to fix your credit?
  

  Hiring a credit repair company may be beneficial if you have legitimate errors in your report. However, you should be cautious of companies promising quick fixes or guaranteeing results, as they may engage in illegal practices.

  Credit repair companies don’t do anything you can’t do yourself. But they may be helpful if you don’t have the time or prefer professional guidance.

• Should I pay for a credit sweep?
  

  No. Reputable companies do not advertise credit repair sweeps. Companies that do may take your money without delivering results. Even worse, they could land you in legal trouble. Instead, work on valid credit repair strategies or seek help from a reputable credit counseling service.