Don’t pay anything up-front

Avoid a Credit Repair Company that wants you to hand over a fee or payment before they meet with you. Reputable companies will first talk to you, assess your credit report and discuss your current situation before asking for any type of payment for their services. An up-front fee is a red flag that the company will probably take your money and run. And no matter what type of charges you may incur, be sure they aren’t exorbitant. If a Credit Repair Company claims your case will cost thousands of dollars, look for another one.

Watch out for “re-inventors”

Some companies will tell you that you can wipe your credit slate clean by “re-inventing” yourself with a new social security number. But that’s not true! In most cases, what they plan to do is get you a new credit report by applying for an Employee Identification Number (EIN)–used by businesses–which resembles a social security number, and you’re told to use it as such. But this practice, known as “file segregation,” is a scam, and it’s also illegal! Avoid any Credit Repair Company that suggests this practice.

Look for one that helps you help yourself

A good Credit Repair Company will tell you (for free!) what you can do yourself, such as writing letters to creditors and contacting the credit reporting bureaus about errors. Avoid any Credit Repair Company that encourages you to do anything illegal or unethical–such as disputing a legitimate charge or fee on your credit report.

Before signing up with any Credit Repair Company, make sure you check with the Better Business Bureau. They’ll have records of any formal complaints against the company, so you can avoid scammers and rip-off artists.

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A major advantage to repairing your credit yourself is the money it will save you. You would only need to pay for postage for your correspondence with the credit bureaus, creditors, and collectors; and the costs to obtain copies of your credit reports. You also may wish to subscribe to an online service that allows you to monitor your credit scores for a monthly fee, since your scores will not be listed on your credit reports.

You can expect to pay an average of $100 monthly for credit repair services, although some agencies charge much more, or even a little less.

Of course you are probably interested in saving money, but please be advised that fixing your own credit can be quite time-consuming. Not only is disputing information on your credit reports in itself time-consuming, but before you even begin you must do your homework! Legal credit repair is made possible solely by the laws that protect you as a consumer.

If you do not truly comprehend these laws, you won’t be able to use them to your advantage in order to repair your credit. There is no shortcut; you will need to spend the hours of reading necessary to learn the laws. Your credit repair efforts won’t be successful if you don’t understand the laws and how they are applied, so if you don’t have the time or patience to learn them, self help credit repair may not be for you.

Another point to keep in mind is that credit repair can sometimes be difficult for most people simply because they are not used to dealing with credit reporting agencies, creditors, and debt collectors. Intentionally or not, they seem to have their ways of making credit repair tough for the average consumer; truth be told it doesnt serve their interests for you to fix your bad credit, so they are not inclined to make things any easier for you. However, credit repair agencies are well-versed at handling this issue, and they know the best way to respond.

Granted, with some experience and research, you would probably become more skilled at handling it also, but it can be so disheartening when your efforts are shot down over and over, that it is enough to make many people give up. It all comes down to how much patience you have and how high your frustration threshold is.

People have been successful at repairing their credit both by hiring someone to do it for them, and by doing it themselves. Each method has advantages and disadvantages, so ultimately your decision should be based on how much time, patience, and finances you have at your disposal. If you feel confident enough to tackle credit repair yourself, or if you just cant afford to pay a credit repair agency to do the work for you, you might want to try doing it yourself.

However, if you don’t mind paying for convenience and can afford to pay for credit repair services, this option may be more suitable for you. (If you opt to use a credit repair company, never hire one until you have carefully investigated it to make sure it is reputable.)

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