Is credit repair legal?

Yes, although it depends on the method. For example, while it is legal to challenge negative items on your credit reports which you believe to be inaccurate, misleading, or unverifiable, accurate information is supposed to remain on your credit report. By contrast, it is entirely illegal to create a “new” identity by applying for an Employer Identification Number to use instead of one’s Social Security Number — a process known as file segregation — in order to escape responsibility by hiding one’s credit history. File segregation is a serious crime and can result in fines or imprisonment.