Chanell Thames took the test for a homebuyer’s class from her hospital bed, the day her third daughter was born. It was 2021, and she’d been living in government-subsidized public housing in Roxbury, the neighborhood in South Boston where she’d grown up. At night, in her two-bedroom apartment, mice would scoot into her two older girls’ beds, forcing the three of them to share her queen bed. Then the bed bugs and roaches moved in. Every day, she dreamed of providing a better place to live for her kids. Nobody in her immediate family had ever owned a home before, but she thought: Why shouldn’t I be the first?
Thames had been feeling hopeful lately. The nearly $15,000 she owed to Everest University, a trade school that she’d attended to get a certificate as a massage therapist, had been canceled after the school turned out to be a scam. She still had debts, but the more manageable kind, from two Capital One cards and a Fingerhut card to which she’d charged a handful of essentials: new furniture she’d bought to try to get rid of the bed bugs, groceries, diapers, formula, clothes for the girls.
Yet her main obstacle, she learned from the homebuyer’s class, was her credit score. Currently around a 582, it needed to be at least 650 if she wanted any chance of getting a decent loan for a house. If she could raise it to 760, then interest rates would be even lower. A few months after she got home from the hospital, she went online and searched “how to fix a credit score.” The first thing that popped up was a service called Lexington Law. The national company advertised “trusted attorneys” promising to boost her score with packages ranging from around $20 a month to $140 a month. She clicked the blue button on its website—Start Now—and filled out her name and address to get a “free credit assessment.”
A good credit score is the crucial first step in the climb out of poverty, while a bad score can function as an invisible embargo on acquiring life’s basic necessities. The scores, which range from 300 to 850, are meant to act as an index of a person’s financial health—and therefore of their likelihood to pay back creditors on time and in full. In most states across the United States, consumers need to have a score of at least 660 in order to rent an apartment, get or refinance a decent mortgage, keep a cell phone, pay utility bills without an additional fee, or qualify for a low-interest loan for a car. Bad credit, meanwhile, can expose them to additional costs and penalties. In certain places, landlords can reject prospective tenants because of their low credit scores. Low scores can allow auto insurers to double their yearly premiums in some states, and a single late payment on a credit card could depress a score by up to 125 points.
Thames could barely afford Lexington Law. She was earning $20 an hour at an admin job in a nearby children’s hospital, supporting three kids as a single mother, and living off food stamps and the little help her own single mother could give her when she fell behind. After-school activities for her two older girls cost $500 a month; day care for her youngest was $300 a week. But everything that she wanted in life felt like a puzzle that began with fixing her credit. With a higher score she could get her kids into a cleaner, safer house—and maybe even out of Roxbury, where she’d grown accustomed to ducking at the sound of gunfire.
Right after she filled out an inquiry, in 2022, Thames got a call from a representative at Lexington Law, asking her about her credit needs and long-term spending goals. “I’m looking to buy a home,” she told him. The man, according to Thames, was confident that the firm could help her get a much higher score. When she expressed confusion about how the process worked, she said, the representative reassured her with vague statistics about a high success rate. “They are professionals,” she told herself. “This is what they do.”
But how that service actually functioned was shrouded in mystery to her. Unbeknownst to Thames at the time, the company, which is part of the ballooning credit-repair industry, was being sued by the Consumer Financial Protection Bureau. The lawsuit alleged that some of the largest credit-repair companies in the country, including Lexington Law, violated industry telemarketing regulations by charging advance fees and engaged in unlawful billing practices, harvesting billions of dollars from some four million consumers. The scheme disproportionately affected economically vulnerable customers like Thames, customers who devoted scarce resources to the firm in hopes that it could help them take the first step out of poverty.
But to Thames the company seemed like the start of an answer to all her problems. Nobody had ever shown her how to build good credit; her mother, mistrustful of banks, always warned her never to get a credit card. Now she was in over her head. “You’re not taught these things growing up, and now you’re an adult, and you got this credit thing you need help with, and you’re trying to figure things out,” she explained to me. “My goal was just ‘I’ve got to get my credit together,’ and so I left it to Lexington Law.”
Credit is the invisible aperture to a better life in America. It is a fundamental part of the financial apparatus that Aaron Klein, a senior economist at the Brookings Institution, likens to an orchestra: “The investors who want to buy loans of a certain credit caliber, the lenders who want to automate their underwriting, the borrowers who are trying to get their credit to look good,” Klein told me. “But the dirty secret is that credit scores are the out-of-tune oboe.”
America’s credit system dates back to the early 1800s, when country storekeepers would get loans from banks by asking their neighbors to vouch for them. In the 1950s, a more formal system materialized. The first credit reporting “bureaus” tracked consumers’ behaviors in small towns, working directly with a single bank or retailer to find out whether a consumer had a “negative” or “derogatory” record—sometimes scouring local newspapers for notices of arrests, promotions, marriages, or deaths. Merchants could use the information to decide how to manage credit relationships with specific customers. By the 1970s, the industry consolidated from dozens of smaller bureaus into what many in the field refer to as the “Big Three”: Experian, Equifax, and TransUnion. Armed with technological methods of surveillance their predecessors could only dream of, the credit bureaus pored over consumers’ marital status, financial records, spending habits, and even their sexual orientation to determine their credit score.
Yet the entire credit system has been flawed since its conception, inadvertently favoring those with assets and generational wealth. More often than not, the system has helped widen the racial wealth gap. As economist Jonathan Morduch and financial expert Rachel Schneider found in their book The Financial Diaries, which chronicled low- and middle-income families trying to escape poverty, “For decades, communities of color have been denied the credit necessary to invest in homes, businesses, higher education, and other assets that build generational wealth.” A 2022 study from the Urban Institute, a nonprofit think tank, found that “young adults in majority-Black and majority-Hispanic communities are more likely than their peers in majority-white communities to begin their adulthood with lower average credit scores.” The chasm has led to what Mehrsa Baradaran, a law professor at the University of California, Irvine, has referred to as a system of “Jim Crow credit” that extends back to the New Deal. Credit “created a buffer to protect wealth and livelihood against life’s unpredictable tumults,” Baradaran argued. “Credit card and finance companies avoided redlined neighborhoods due to both racism and their risk-prone economy,” leading to an “inescapable debt trap” for Black people. As Klein at Brookings put it to me, the problem is less that those in low-income neighborhoods are not taught how the financial system works, but that they tend to be excluded from it by no fault of their own. “People like to shift the onus to lower-income people to say nobody taught [financial literacy] to them,” he told me. “But you can’t teach your way out of a structurally corrupt and inequitable system.”
As credit scoring became more essential to lenders and banks, consumers’ complaints about mistakes on their reports led to a series of congressional hearings that established the Fair Credit Reporting Act in 1970—a landmark piece of legislation that gave consumers the right to dispute, view, and fix their records. By law, the bureaus are required to conduct a free, “reasonable reinvestigation” within 30 days. “The basic concept was that if you’re going to gather information that really impacts consumers’ financial lives, then consumers have a right to know what that information is,” Peggy Twohig, a former associate director in the Division of Financial Practices at the Federal Trade Commission, told me. “But the structure puts a lot of burden on the individual consumer, not on the industries benefiting from collecting and using this information.”
Part of the problem was that the Big Three bureaus struggled to compare and interpret the results that were coming in from different reports. In the 1980s, the companies began working with an obscure data analytics company in California called Fair, Isaac and Company, which invented the eponymous FICO credit score. The credit score was revolutionary: For the first time, it gave lenders an easier way to assess the financial profile of consumers wanting loans. But, for many Americans, the scoring system was as punitive as it was groundbreaking. Unpaid credit card debts typically stay on reports for an average of seven years, while to even begin to improve one’s score could take up to six months. Even when missed payments are paid off, they remain on credit reports for years. “It’s an awful feeling, because your past mistakes are being held against you,” said Zenique Smith, a woman I spoke to who’d been struggling to raise her credit score after her divorce. “It’s like you’re being enslaved by your mistakes, and you’re not given a chance to prove that you’re doing better, that you can do better.”
Thames had been trying to get her credit score up for over a decade. On June 21, 2022, she signed up for Lexington Law, handing over her bank account number, Social Security number, birth date, home address, and credit card information. She paid $119.95 the first month, and then began getting billed $59.95 a month. One month, when her payment bounced back, she was charged a $9.95 penalty fee. It was a steep price for her, but she trusted the company’s advertisements, which seemed to guarantee that she could get a better score.
A few months after she signed up, Thames got an email from Lexington Law: “Good news!” the message read. “You have positive updates on your credit reports.” The firm had removed a negative item from one of her Capital One cards—a charge on a card she’d opened seven years earlier that the credit reporting agencies, which automatically drop most debts from scores after seven years, would have likely removed soon anyway. The email bolstered her confidence in the company. Soon, more emails began arriving from Lexington Law, notifying her that a few more inquiries were being sent out. At some point, she stopped opening the emails, trusting that the service was working. “You don’t even think about checking in with them, because you’re giving them your money,” she told me. She began to watch as her score went up.
Behind the scenes, Lexington Law was doing on a large scale what the 40,000 or so other credit-repair companies in the United States do every day: sending the three major credit bureaus and furnishers inquiries disputing or asking for verification of negative items—late payments, debt collections—on credit reports. Often, the agencies send inquiries along generic lines to the furnishers that read something like: I am writing to request an investigation of the following information that appears on my [name of credit bureau] consumer report. (Lexington Law’s inquiries, which are sent in bulk to accommodate its millions of customers, are not human readable but encoded information for computer systems to decipher.) At its peak, Lexington Law was sending up to 750,000 inquiries a month to the bureaus, and the company filed a staggering 221 million challenges between 2004 and 2024. By law, the credit bureaus and furnishers have about 30 days to investigate a charge, or the item must be deleted, at least temporarily, from the credit report.
The credit bureaus, unwilling to put in the resources needed to distinguish between authentic letters written by individuals disputing invalid charges and inquiries filed by credit-repair companies, end up rejecting both types of disputes indiscriminately. The charges are then often removed from the client’s credit report, changes that make it appear to Lexington Law’s clients that the service they are paying for is working: Their credit scores may temporarily rise a little, and they continue paying the monthly fee. But in some cases, after the bureaus have time to review the inquiries with the creditors, the charges are reinserted. (According to Eric Kamerath, Lexington Law’s lead attorney, the majority of its clients do not have issues with reinsertions. “From my perspective,” he told me, “if something comes off, it stays off.”) The system has led to a rising and oft-overlooked industry. According to a ConsumerAffairs report, in 2023 the credit-repair industry was valued at more than $6 billion.
The field of credit repair originated as a kind of legal loophole out of cracks in the credit reporting system. It expanded as consumers’ dependence on credit cards grew. Soon after the Fair Credit Reporting Act was established in 1970, a handful of savvy businesspeople realized they could charge a fee to help people fix their credit reports by investigating “negative” claims—unpaid debts—that appeared on the reports. According to the law, every consumer has the right to dispute items on their report, and the agency must “conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate.”
In the 1980s, as credit cards became a fixture in many households, credit “clinics” began cropping up. They advertised quick fixes to help improve peoples’ credit scores for a low cost. But the practice of many credit clinics was, as The New York Times reported in 1988, “at the edge of the law.” Scams were rampant. In one case, 9,000 people were defrauded of about $2 million they’d paid to a company called Credit-Rite Inc. The company took money up front from customers in return for false promises that it would improve their scores. The federal government came after the company and won; two of its executives were sentenced to prison. “It’s impossible to perform this service as promised if someone’s credit history is correct,” Anne Singer, the U.S. attorney who prosecuted the case, said. “The people involved in running these businesses raise the hopes of low- and moderate-income people, and then their hopes are dashed.”
As credit-repair clients started to complain about a number of problems, including “reinsertions”—charges they thought had been removed from their reports that would show up again later—the Federal Trade Commission wrote a new provision in 1995 called the Telemarketing Sales Rule, which was directed at curbing credit-repair companies that used telemarketing practices to gain clients. According to the rule, a credit-repair company that used telemarketing could not legally charge a client until six months after the service had been proved to work. “Basically, the company has to actually do what the consumer is asking, six months have to pass, the credit-repair organization has to show the consumer a copy of their credit report proving the changes are there,” explained Andrew Pizor, a senior attorney at the National Consumer Law Center, or NCLC. “And then it can charge.”
A year later, Congress passed the Credit Repair Organizations Act. The new law “was a response to the industry already being out there and being abusive,” Pizor added. “Credit-repair agencies were advertising to make credit scores look better, so people would pay them lots of money, but it didn’t happen. It was a lie.” Unlike the Telemarketing Sales Rule, which demanded lasting results, the new law mandated that the agencies couldn’t charge anyone until they finished providing the service. Many in the industry interpreted this to mean that they could charge customers after merely sending letters of inquiry to the bureaus.
They consequently ignored the Telemarketing Sales Rule, and instead followed the guidelines, as they understood them, of the Credit Repair Organizations Act. As credit cards became widespread, and credit card debt began to climb among American households, the industry continued to expand. In 2004, an attorney in Utah named John C. Heath acquired Lexington Law, one of the biggest credit-repair companies in the industry at the time.
Heath had learned about credit repair a couple of years earlier, when he’d been unable to get a mortgage on a $100,000 home because the credit bureaus had mistaken him for his father, who had the same name but bad credit, and gave him a low score. Heath’s real estate agent referred him to a “credit-repair guy.” Heath didn’t know who the guy was or what he did, but it worked: His credit score rose, and he qualified for a loan. “I saw that there was the opportunity to help people who were generally underrepresented,” Heath told me. “I thought, ‘We can do some things to really help some people here on a mass scale.’” At the time, Lexington Law had no more than 50 employees and a single physical office in Salt Lake City. The company, along with a small family of other brands that included Credit.com and CreditRepair.com, hired Progrexion, a marketing firm that specializes in credit repair. Though the two companies—CreditRepair and Lexington Law—were pitched as competitors, they both fell under Progrexion’s umbrella.
Under Progrexion, the credit-repair companies deployed the fast-growing internet to their advantage, waging an aggressive marketing campaign to reach millions of consumers. “They certainly helped us expand,” Heath told me. “They had the marketing expertise and the software expertise that helped us manage our client base.” Progrexion paid for sponsored ads that quickly gave Lexington Law a high ranking on Google Analytics, and the company hired third-party “marketers” to lure new clients. It set up call centers in Utah, Arizona, and Idaho and began aggressive telemarketing, promising customers licensed attorneys in all 50 states. Potential clients who saw Progrexion’s ad could be live-transferred from Progrexion’s call centers over to Lexington Law to sign up for the monthly subscription. A computer system would examine every new client’s credit report, looking for “derogatory” or negative charges that could potentially be disputed, then, per the client’s request and based on the amount they were paying per month, Lexington Law would send the bureaus inquiries about the negative charges for the creditors. If the bureaus and furnishers couldn’t respond in time, often the charges would disappear temporarily. (According to Kamerath, “it is not uncommon for Lexington Law to hear back within a few days to a few weeks.”) Rarely would clients speak with actual licensed attorneys; most of their correspondence was with telemarketing agents or paralegals.
Essentially, Progrexion was operating call centers where trained telemarketers appealed to consumers with packages priced according to the number of disputes a client wanted challenged. In some cases, Progrexion’s marketing partners baited clients by offering nonexistent zero-percent mortgages on homes. Interested clients were then told they had to fix their credit first and were live-transferred to Lexington Law’s representatives. The model was astonishingly profitable. By 2022, Progrexion’s combined annual revenues were roughly $388 million.
Yet a number of former clients I spoke to complained that Lexington Law’s services ultimately did not help raise their credit scores. One man felt that the company intentionally dragged things out, charging high fees without any end contract. “They stretched out the process,” he told me. (“I would have expected more for him,” Kamerath said when I asked him about the man’s experience. “Some people see better, some people see worse. He’s in the some people see worse category.”) After more than a year of using the service, spending over $1,600, his score did not improve. “I gave up on trying, because I really didn’t want to keep making that payment,” he said. Dianne Bauer had a similar experience: “It’s keeping you stuck versus moving you forward.” As another man I interviewed put it, “Imagine paying money for a car that you can’t drive. That’s how I felt.”
Barbara Alcena was skeptical of most credit-repair companies but trusted Lexington “because they had the name ‘law’ behind it.” However, after more than six months of using the service, on which she spent over $1,000, her score hardly rose. “When you’re desperate, you’re going to try everything,” Alcena told me. “I ended up just feeling like it was a scam, because the needle [on my score] had not moved. I did not receive some of the services I was promised I was going to receive.”
After more than six months of using the service, on which she spent more than $1,000, Barbara Alcena’s score hardly rose. “When you’re desperate, you’re going to try everything,” Alcena told me. “I ended up just feeling like it was a scam.”
The trick to Lexington Law’s success is that, for some of its clients, the service initially appears to be working. By November 2022, Thames’s score climbed up to a 628. Elated, she scheduled an appointment with her bank to discuss the possibilities of getting a mortgage for a new home.
But when she arrived at her bank a few months later, an employee told her that her credit score had slipped back down. He pointed out some items she’d thought Lexington Law would have removed: new charges on her Capital One cards and her Fingerhut card. Thames was confused. “I’m sitting here like, ‘I thought that was gone, I thought they got rid of that shit,’” she recalled. (According to Lexington Law, there were no reinsertions on her credit report.) She didn’t know what to tell the bank employee. In tears, she left the meeting and called Lexington Law to ask why her score was falling. Why hadn’t they removed her debts and raised her score like they’d advertised?
On the phone, according to Thames, the representative dodged her questions, telling her the company had been sending emails requesting she reach out to the creditors herself. (According to Lexington Law, it is standard practice to ask clients to send out their own letters regarding “new hard inquiries”—creditors who pull their reports to determine if they are creditworthy.) When she asked what service she was paying for if she was being required to send the letters herself and threatened to close her account, she recalled, the representative tried to persuade her to stay with the company, offering large discounts off the $59.95 a month she was already paying. The firm promised her again that it could bring her score back up, this time for $24.95 per month. She reasoned that $25 a month was a small fee to pay to get her score back up. She agreed to try again.
A few years before Thames had signed up for Lexington Law’s services, the Consumer Financial Protection Bureau issued a warning, which it posted in an online bulletin: “Don’t Be Misled by Companies Offering Paid Credit Repair Services.” “Sometimes this marketing includes confusing and misleading messaging aimed at taking advantage when you’re just trying to get your financial life back on track,” the bulletin explained.
Two years before that warning, in October 2014, the CFPB sent a Civil Investigative Demand, or a CID, to Lexington Law’s chief attorney. To Kamerath, the request, which was sort of like an administrative subpoena, felt vague: It identified the 2010 Dodd-Frank Act’s prohibition of unfair, deceptive, and abusive acts or practices, and cited the Telemarketing Sales Rule, insinuating that Lexington Law was manipulating its clients with false promises. At the time, the CFPB was a relatively new organization. The brainchild of Elizabeth Warren, who was then a law professor at Harvard, the CFPB was consecrated by Congress under the Obama administration in 2010, largely as a legislative response to protect consumers from the predatory mortgage lending practices that many believed contributed to the financial crisis.
Kamerath was surprised to receive the demand. “The CFPB was a new, big, scary government agency,” he told me. “When you get a CID, it’s an expression by the regulator that they’re worried about something.” The team at Lexington Law immediately hired outside counsel from a firm in Washington, D.C., but were puzzled by what the bureau was looking for. The CFPB’s initial request felt intentionally broad to Kamerath. The agency wanted to understand how Lexington Law’s entire operation worked: what technology it used, the databases where information was stored, complaint data, and what fees were charged.
In May 2019, the bureau filed a formal lawsuit against Progrexion, Lexington Law, and CreditRepair.com, among other entities. In the lawsuit, the CFPB alleged that the companies were violating the Telemarketing Sales Rule by illegally charging customers up front for credit-repair services offered through telemarketing. The bureau also alleged that the company relied on marketing affiliates that used “deceptive, bait advertising” that violated the Consumer Financial Protection Act. In a pretrial hearing, Maureen McOwen, an assistant litigation deputy at the bureau, urged the judge to enter a summary judgment rather than allow the case to go to trial. “There’s no dispute as to how [the companies] bill their customers,” she told the judge. “They do not wait the prescribed period under the rule.” Progrexion’s attorneys pushed back, arguing that the company never promised results to consumers in its advertising practices. “What’s very clear in all of the company’s policies with respect to marketing and advertising is that we cannot guarantee or promise that particular derogatory information will be removed from a credit report,” Progrexion’s attorney quipped, “or that a consumer will see a particular improvement in their credit score.”
Not everyone who uses credit-repair companies has had a negative experience. Niurka LeBron didn’t find out until she was 28 years old and applying for her first credit card that her aunt had run down her credit score by opening cards in LeBron’s name. She paid a small fee to a local guy in her Boston neighborhood who ran a small credit-repair company. “Within a few months, my credit was clean,” LeBron told me. Some clients prefer to pay Lexington Law because they don’t trust the credit bureaus. One man I spoke with, John C., had spent some $9,000 on Lexington Law’s services since 2020. He finds the company’s rates affordable. Despite the fact that his score still fluctuates, he continues to use the service so that he doesn’t have to worry about keeping track of it. “Even if I have no derogatory marks, I’m going to just keep paying them to monitor it,” he told me. Kamerath, too, feels that a lot of the criticism directed at credit-repair companies is unjust. “Most people don’t have decades of experience,” he told me. “In my mind, the question isn’t usually whether consumers can prove a [bureau] is wrong. Often the question is whether the [bureau] can demonstrate proper recordkeeping and compliance with laws.”
Still, some of the marketing practices that were uncovered in the lawsuit were baldly misleading. In one example listed in the complaint, Progrexion paid money to third-party marketing affiliates advertising home loans that “guarantee[d] ANYONE a 0-3.5% Down Home Loan no matter how bad their Credit is when we start!”—so long as interested consumers enrolled in Lexington Law’s services first. They’d be live-transferred on the phone straight to Lexington Law, but they were never offered a home loan. “The Progrexion Defendants paid this marketing affiliate for each credit repair sale that resulted from its efforts, despite knowing that it engaged in deceptive practices,” the complaint read.
In 2023, the four-year legal battle came to an abrupt end. A federal judge in Utah ruled that the defendants violated the Telemarketing Sales Rule “by billing clients for credit repair services before the timeframes required by the advance fee provision had expired.” Between 2016 and 2023, the court found, Progrexion and its affiliated companies had illegally abused telemarketing practices to reach millions of consumers. The companies were ordered to pay a $2.7 billion settlement. The lawsuit was one of the largest-sum wins in the CFPB’s history. The judgment ordered that the companies be barred from doing any type of telemarketing for 10 years.
The ruling came as a shock to many in the credit-repair industry. “Picture if you woke up tomorrow, and there’s a new speed limit on that road that is negative five miles an hour,” Matt Liistro, organizer of CreditCon, the annual credit-repair industry trade conference, told me. “How do you comply with negative five miles an hour? Do you drive your car backwards? Or are you set up to fail because there’s absolutely no way to be compliant with negative five miles an hour?”
Progrexion voluntarily declared Chapter 11 bankruptcy in 2023, and laid off 80 percent of its staff. “It was a horrific experience,” Kamerath told me, recounting the email he sent to nearly 3,000 employees, letting them know they’d be terminated, effective immediately. But however hard it was on employees, the bankruptcy gave Lexington Law a way out: In total, the company paid $50,000 to the CFPB. In December, the CFPB announced it would begin reimbursing some 4.3 million former clients with money from its Civil Penalty Fund. “This historic distribution of $1.8 billion demonstrates the CFPB’s commitment to making consumers whole,” Chopra, then the head of the CFPB, announced in a press release. “Even when the companies that harm them shut down or declare bankruptcy.”
A company called Lexington Law still exists today, offering essentially the same services it did before the lawsuit. After filing for bankruptcy, Lexington Law in its original incarnation was forced to shut down, selling its assets to a new holding company called Oquirrh Mountain Law Group that purchased the rights to the company’s name. (The name is “a valuable asset,” Kamerath told me.) Progrexion is a shadow of its former self as it works its way through bankruptcy, and John C. Heath stepped down. He’s now involved in running a legal journal about democracy in the Middle East. Part of the settlement agreement was that the company could no longer market to clients over the phone, but these rules haven’t stopped it from appealing to clients like Thames online, often with messages that are still misleading. To consumers, it looks as if nothing has changed. “They are just doing the same business,” Pizor of the NCLC told me. “They’ve just reorganized. They don’t use telemarketing. They do their business over the internet now.”
For months after her conversation with the Lexington Law representative, Thames continued to pay the company at her new, reduced rate. She was busy raising three daughters and working at Boston Medical Center. Her two-bedroom subsidized apartment had begun to feel unlivable. She regularly called the management company to complain about the insects and rodent infestations, but her calls were never returned. A few days before Christmas in 2023, she showed up to the management company’s office in tears. “My kids can’t live like this anymore,” she yelled to the assistant sitting in the office. Finally, the company agreed to upgrade her to a three-bedroom apartment in a different building, but the new apartment came with its own host of problems. Trash bags piled up in the dumpster outside her front window, attracting rats. Then there was a mice infestation. Thames got a cat. One day, her oldest daughter called her sobbing: An addict at the local Dunkin Donuts she stopped at on her way to school had assaulted a worker and threatened her. Thames felt stuck.
She continued to check her credit score through her bank. When she noticed, in May 2023, that her score had gone back down—hovering around a 513—and the debts on her credit report had not been paid, she called the company again. This time, she had no patience left. She demanded—ignoring repeated offers to lower the price even further—that her services be canceled entirely. “You feel, basically, like you’ve been robbed, because you have been,” she told me. “You just gave somebody money for nothing.” She had spent around $500 on Lexington Law, and wasted a year of her life hoping it would work. “I’d paid all this money—money that could’ve gone into a mortgage,” she told me. “The whole buying the house thing just goes out the window.” She let her homebuyers’ certificate expire and gave up on the search. She still spends time on Zillow nearly every day, fantasizing about the house she will one day live in. It will have a front porch for her girls to sit on, she told me, and a backyard for them to play in, and enough space for everyone to have their own bedroom. But for now, she said, “That dream is on hold.”
The ruling against Lexington Law and its affiliates appeared to be a high point in the history of consumer financial protection law enforcement, and yet the company’s persistence underscores the limits of predominantly legalistic approaches to dealing with the credit-repair industry—and the various other companies that profit by making misleading promises to the most vulnerable. “You don’t solve the system through enforcement, right?” Klein, the senior adviser at Brookings, said. “The CFPB alone can’t fix this. The CFPB is like a cop arresting a car thief. But is that going to stop people from stealing cars?”
What’s more, the agency is now facing an existential threat. In his first month in office, President Donald Trump fired CFPB director Rohit Chopra, who had a reputation for reining in the U.S. banking industry. Trump also ordered 1,700 CFPB employees to stop working. Elon Musk, who is heading the Department of Government Efficiency, posted on X: “CFPB RIP” with a gravestone emoji.
It’s an open question whether anything can stop such practices. Many consumer advocates have their eyes on a new bipartisan bill, the Ending Scam Credit Repair Act, or ESCRA, that was recently introduced to Congress. If passed, the bill would all but decimate many big credit-repair companies: It would require any company, whether it used telemarketing or not, to wait six months to collect fees from customers until results are proved, force the companies to self-identify in their letters to the bureaus, and prevent the companies from “jamming” the system with letters. To Kamerath, the bill is “largely bad policy” that would “restrict consumers’ rights to seek help from third-party advocates in fixing credit report errors and insulate bad actors from accountability.”
Last October, I met Thames at a Dunkin Donuts near her apartment in Boston. She wore a matching hot pink sweatsuit, and her dark hair was wound into a tight knot of thin braids. She’d decided to pursue a new career path altogether, enrolling in a 14-week course with New England Culinary Arts Training to learn how to be a chef. She’d grown up helping her grandmother in the kitchen and heard she could make good money as a line chef. She was still struggling to get her credit score to go up, which hadn’t recovered from its current status—467—after she left her job in July 2023.
As we spoke about her credit score and her dreams of buying a house, a young Black woman sitting at the table next to us approached. “I don’t mean to butt into your conversation,” she said. “But I’m in this situation right now.” She was a single mother of four, living in a nearby shelter and trying to figure out how to get out of the hole she felt stuck in. Her shift at the donut shop was about to start. She didn’t know how to improve her credit score, she told us, on the edge of tears.
Thames cut her off. “OK, I’m telling you from experience, do not allow these people to put you in a situation where you cannot rise.” She tapped her fingers on the table, taking a sip of iced coffee. “You take whatever your talents are, whatever you got for you and your children, and start your own business. You know what generational wealth is? They didn’t teach us that. But we’re gonna learn on our own. So you go and get yourself a credit card, and you put your baby’s name down underneath your credit card. By the time they’re out of high school, they gonna have to worry about nothing.”
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Ballooning
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