The Latest Credit Repair Statistics & Facts for 2023
Even though the average credit score in the US reached its all-time high in 2021, credit repair remains a sought-after service as Americans are still struggling with their credit scores which, in turn, affects their overall financial well-being. These credit repair statistics reveal the latest state of the industry along with historical data and additional insights into its economy, as well as pressing problems such as fraud and consumer complaints.
Credit Repair Statistics – The Highlights
The market size of the credit repair services industry in the US is $4.4 billion.
There are 43,791 credit repair service businesses in the United States.
At 2,694, California is the state with the highest number of businesses in the credit repair service industry.
There were 3,151 credit repair fraud cases reported in 2021.
35% of credit repair complaints reported to the CFBP in 2020 were related to fraud or scams.
Credit repair takes between three to six months, on average.
Credit Repair Industry Statistics
The market size of the credit repair services industry in the US is $4.4 billion.
While the industry’s market size is expected to grow by 9.5% in 2022, the above figure is the result of a compound annual growth rate (CAGR) of -3.2% between 2017 and 2022. When compared to the advisory and financial services industry overall, the credit repair industry declined at a faster rate between the aforementioned years, primarily due to its declining life cycle stage.
(IBIS World)
There are 43,791 credit repair service businesses in the United States.
When it comes to the credit repair industry growth, the above figure is expected to decline by 2.1% in 2022 and is the result of a compound annual growth rate (CAGR) of -6.7% between 2017 and 2022. The industry has a low market share concentration, and there are no companies that exceed a market share point of 5%.
(IBIS World)
At 36.4%, wages account for the highest costs for businesses in the credit repair service industry.
As a percentage of revenue, the second-biggest costs are purchases at 10.9%, followed by rent and utilities, which account for 4.7% of credit repair service businesses’ revenue.
(IBIS World)
At 2,694, California is the state with the highest number of businesses in the credit repair service industry.
According to credit repair business statistics, on the list of US states with the highest number of credit repair services, Florida and New York follow with 2,355 and 1,350 businesses, respectively.
(IBIS World)
During the first three quarters of 2022, the CFPB received 6,243 complaints related to credit reporting, repair, or other personal consumer reports.
Considering the total number of complaints during the same period stood at 9,258, credit repair industry statistics reveal that the above figure translates into 67% of them.
Of them, 2,282 (or 36.5%) were due to incorrect information on consumers’ reports, 2,035 (or 32.56%) were due to improper use of consumers’ reports, 1,651 (or 26.4%) were due to problems with a credit repair company’s investigation into an existing problem.
Less common complaints were related to consumers being unable to get their credit report or score (182 complaints) and problems with fraud alerts or security freezes (30 complaints) which, according to credit repair statistics, respectively account for 2.9% and 0.48% of all complaints reported to the CFPB related to credit reporting, repair, or other personal consumer reports during the first three quarters of 2022.
(CFPB)
National consumer reporting companies resolved less than 2% of complaints they received in 2021.
Referring to Equifax, Experian, and TransUnion combined, the above figure was nearly 25% in just two years earlier, in 2019. Between January 2020 and September 2021, the CFPB received over 700,000 consumer complaints related to these companies, accounting for over 50% of all the complaints that the agency received in the same period.
(CFPB)
Illegal Credit Repair Companies Statistics
There were 3,151 credit repair fraud cases reported in 2021.
The above figure accounts for a mere 0.05% of all fraud reported in the same year and marks a near 9% decrease from the one in 2020 when there were 3,432 cases reported accounting for 0.07% of all reported fraud. In 2019, the number of credit repair fraud cases stood at 4,097, accounting for 0.12% of all reported cases.
(FTC)
35% of credit repair complaints reported to the CFBP in 2020 were related to fraud or scams.
According to credit repair services statistics, customer service problems ranked second, accounting for 23% of complaints, followed by confusing or misleading marketing or advertising with 17% and unexpected or additional fees with 10%. Confusing or misleading disclosures accounted for 8%, while excessive fees accounted for 7% of credit repair complaints reported to the CFPB in 2020.
(Statista)
In August 2017, the CFPB took action against a credit repair company for misleading customers and charging illegal fees.
Incorporated in Delaware, Prime Marketing Holdings operated under a variety of names and charged more than 50,000 consumers over $20 million for credit repair services between October 2014 to (and potentially beyond) June 2017.
According to credit repair facts, Prime Marketing Holdings charged initial fees that were sometimes required to obtain “special” reports, along with hundreds-of-dollars-worth set-up charges and monthly fees, often around $90, which the company failed to disclose in sales calls. It further promised to remove negative entries from credit reports, as well as average credit score increases of 100 points. Additionally, the company didn’t disclose its money-back guarantee terms, such as the fact that consumers had to pay for at least six months worth of services to be eligible for it.
Statistics on credit repair reveal that the proposed final judgment against Prime Marketing Holdings was to permanently seize credit repair operations and pay a civil money penalty of $150,000.
(CFPB)
FAQ
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The Summary
Over the past five years, there’s been a steady compound annual decline rate in the credit repair industry, both in terms of the market value measured by revenue and the number of companies operating within it. As these credit repair statistics reveal, the aforementioned might be attributed to the average US credit score reaching its all-time high in 2021, as well as the increasing number of complaints and fraud cases reported in the industry. Considering credit scores are the ultimate indication of Americans’ financial well-being, credit repair doesn’t seem to be potentially extinct any time soon. The industry, however, does have to address certain issues that are affecting its growth and operations.
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