Shopping for a Credit Repair Company

The first thing you need to do when shopping for a credit repair company is understand a little bit about the industry. When credit report repair was in its infancy, it was an industry that was poorly regulated. This resulted in the creation of "credit repair" companies who promised all sorts of wonderful things, charged a small fortune for services, and rarely delivered as expected. Since then, the federal government has stepped in to protect you as a consumer. They enacted multiple rules and regulations dictating how a credit repair agency can operate. They also worked hard to shut down credit repair scams.

Knowing the rules that are in place to protect you is the first step towards selecting a credit repair company. A brief overview of these rules is listed below. Naturally, you do not want to work with a credit report repair agency that does not follow them.

Payment Only for Services Rendered
To curb the practice of charging huge upfront fees for credit repair services, federal legislation now states that credit repair companies are only permitted to charge customers AFTER they have performed the work being paid for. This is opposite of many other services like cable television where you are billed a month in advance.

Any credit repair company that demands hefty upfront fees should be avoided. A note on this is that "setup fees" are common in the industry. For example, a credit repair company has to go through the process of creating a record of your account and otherwise adding you into their system. They will charge a setup fee for this process but as dictated by law they can only collect this money from you after you account has been established.

Anytime Cancellation Policy
You have the right to end your relationship with a credit repair company at any time and only pay for the services that have been provided at that point in time.

Dispute Only Items as Requested by Client
Credit repair organizations are only allowed to dispute the items that you tell them to. If they do not provide you with a way to designate which items on your reports you want removed, they are not in compliance with the law.

This rule was enacted to counter the credit repair companies who would simply dispute evey single item on client's credit reports. This practice is not legal for people who dispute their own credit reports because they are limited to disputing items that they feel are inaccurate, unverifiable, or misleading. It was a natural extension to also make it illegal for the credit repair companies acting on the client's behalf.

No Guarantee to Remove Specific Items
It is impossible to legally remove an item from a person's credit report when that item can be verified by the credit bureaus. That being the case, credit repair companies cannot say with certainty that they can remove a specified item or number of items from a credit report. Any credit repair company who says they can is not compliant with the law and should not be trusted.

No Guarantee to Improve Credit Scores
Along with not being able to guarantee certain items will be removed from credit reports, credit repair companies are also not permitted to promise an increase in your credit score.

No Use or Suggestion of File Segregation
File segregation is the process of creating a new credit report with the credit bureaus. It is illegal for a credit repair company to do this for you and it is illegal for you to hire someone to do this or to attempt it yourself. File segregation is a federal offense and could land you in prison. Steer clear of any company that claims to be able to give you a fresh start or to otherwise clear your credit history by creating you a new credit identity.

Now that you know what things to avoid in a credit repair company, let's move in a more positive direction and cover the things you should look for. Once you choose to get help with repairing your credit, you will likely end up paying $50 or more per month so you will want to know that you made a good choice of companies to use.

1. Reputable Service with an Established History - Seek out a credit repair company that looks professional and acts the part. Is their site informative and does it function properly? How long have they been in business? Are they a member of the BBB? How is their record with the BBB?


2. Available When You Need Them - Do they have a toll free number? What are their hours? After you become a client, do they have people you can talk to?


3. Variety of Options and Pricing - Not all services offered by credit repair companies are required by all clients and some credit repair companies may not offer the services you need. Make sure a credit repair company can provide the help you need.


4. Quality Refund Policy - Credit repair companies are not able to guarantee results but they can provide a refund if they are not able to get results. Make sure you will not have to pay if a repair company is not able to deliver.

Because of the unique strengths of their legal status, law firms have emerged as the most successful types of credit repair agencies. Credit repair law firms have advantages that make them particularly adept at credit repair. In addition, when you sign a retainer agreement with a credit repair law firm, your relationship with the law firm is protected as one with attorney-client privileges.

Currently, the most successful credit repair law firm and as an extension the most successful credit repair company available is Lexington Law. Lexington has been practicing credit report repair for over 17 years and follows all of the best practices detailed above. For more information about Lexington Law or about credit report repair, visit www.lexingtonlaw.com.