Four Tips for Selecting a Reputable Credit Repair Service

As is the case with car mechanics, insurance agents, plumbers, and every other profession, there are quality credit repair companies and others to avoid. Below are four tips for identifying a company you can trust.

1. Find out how long the company has been operating as a credit repair organization. Credit repair is an industry on the rise with new participants coming and going all the time. Try to select a company with a solid foundation that you have confidence will be there for you in the long run. You definitely don't want to end up with a service that disappears before they are done helping you.

2. Make sure there is full disclosure. There is nothing a credit repair company can do for you that you cannot do for yourself. In fact, credit repair companies are required by law to inform you of this fact via a written disclosure statement titled "Consumer Credit File Rights Under State and Federal Law" when you sign up. Make sure you are presented with this document.

On top of this, note that credit repair services cannot be guaranteed to be effective because ultimately, whether or not something gets deleted from your credit record is up to the credit reporting agencies and your individual creditors. Be wary of organizations that guarantee to raise your credit score.

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3. Make sure their billing policy is legally compliant. By law, credit repair companies are not permitted to collect any fees before performing the agreed upon services. This is to protect people from scammers who would promise to be able to repair their credit report for an upfront fee (often times charging thousands of dollars) and then disappear once the payment was received. This is why most credit repair companies charge a setup fee for creating your account (you should not be charged as soon as you sign up and will in many cases not be charged for a few days), and a monthly charge after the previous month's services have been provided.

4. Know the signs of a credit repair scam. Because so many Americans are desperate to improve their credit but know relatively little about how the credit reporting system works, scammers have set up shady credit repair clinics claiming to help people but only end up making the situation worse. The Credit Repair Organizations Act was created to protect consumers from becoming a victim of a credit repair scam by establishing rules credit repair companies must adhere to. Knowing these rules will help you avoid being taken advantage of.