I have a scale that I bought that gives weight and body fat %. I was wondering how accurate it is? I haven't been losing anything, but I am gaining weight right now (up to 3 lbs). I am doing the zig zag with calories (between 1400-1800 calories), and I am eating correctly (I have not cheated). Anyway, my body fat % was 60% when I started, but now it is 57%. So if the body fat % is correct, I am gaining muscle and have nothing to worry about, right?

If you notice a downward trend over time, I imagine that you can trust that. That said:

Scales are only moderately accurate readers of body fat. For one thing, they are highly dependent on your hydration level. Alcohol and heavy exercise or sweating—dehydration issues—can throw off the scale. Skin temperature can also adversely affect the results of body fat scales, by affecting the electrical current the scale generates.

What makes these puppies work is that the signal travels faster through water. Because muscle is largely water, and fat contains little water, the scale is able to make a distinction and give you a reasonable estimate. But you can see from how it works how important hydration is to the equation.

They are 80% reliable... If you need an exact measurment it's best to have your body fat measured and then make the adjustment to the one on the scale...

but one thing for sure the percentage of fat number on the scale will go down as you loose FAT! Then when/if you occassionally gaining weight because you are gaining MUSCLE (or it's TOM!) you will not give up and end up gaining real weight, by which I mean weight from FAT!

I can change mine just by drinking a glass of water. However, over time, they are useful. Mine has been 33-35 % since starting, then 32-34% lately, and recently I saw a 31% for the first time. While I don't know if its at all accurate, I see a downward trend over time, and that is satisfying. I think you are likely seeing a downward trend indicating you are building muscle.
In terms of a stall happening fairly early in your journey, I am wondering if your period is coming on? that is a common cause of (temporary) stalls.
good luck