Federal law says that information about you that is reported to the credit bureaus must be accurate and fair. However, the Federal Trade Commission reports that one in four consumers have errors on their credit reports that lower their credit scores!
Credit repair is about fixing these errors so your credit report and credit score are the best they can be. The process, which can be quite cumbersome, involves disputing the errors in your report directly with the credit bureaus.
What kind of errors might be on your report? Late payments, unknown accounts, collections, foreclosures, charge-offs, liens, judgements, or bankruptcies. Any of these can reduce your score by a significant amount.
Credit repair can be performed by you but it is very complicated. In the past most people have used credit repair organizations. These are companies that do credit repair for you. You have to buy your credit reports and hand them over to the CRO. The CRO staff read through your report and then perform the credit repair for you. You have no control over the process and are vulnerable to getting ripped off by a CRO.
CROs for the most part were all pretty similar. Some are total scams and it is difficult to tell which are reputable and which are not. Even the reputable ones have questionable practices like purposefully limiting the number of items you can dispute each month -- so they can keep you as a customer longer.