Credit Repair Companies- What to Look Out For

Credit repair companies are supposed to be there to help you with your bad credit problems.  Unfortunately, many companies are only interested in taking your money.  If you’re going to use a company to repair your credit, you need to know what to look out for.  Here are several things you should consider before making your decision.

• Illegal Practices.  You should stay away from any company that repairs your credit through illegal means such as creating a new identity for you or having you falsely use an EIN instead of your SSN.  While it’s important to repair your credit, you don’t want add legal problems on top of bad credit.

• Complaints/Negative Reviews.  Any company you’re interested in using should be thoroughly researched.  You can check with the Better Business Bureau for unresolved complaints.  You may also want to look online for personal reviews of the company.  Be wary if you see a high number of negative comments.

• Outsourcing.  Before you sign up with a company, find out if they outsource any of the work overseas.  Since you’re going to be giving them sensitive information, you should know exactly who will be able to see it. Also, it may not be as easy to take legal action against someone in another country if something were done to your credit.

• Questionable Advice.  You may need to be suspicious if the credit repair company advises you not to contact anyone yourself about your credit.  You have every right to contact your creditors or the credit bureaus about your credit.  You should question anyone who tells you otherwise.

• Generic Templates.  Credit repair companies charge you a monthly fee to personally work on your credit.  What works for one client will not work for another, so they shouldn’t be using the same letters over and over.  Make sure all of the information sent to credit bureaus on your behalf is personalized to your specific situation.

• Lack of Updates.  Since credit repair is an ongoing process that requires a monthly fee, the company you choose should be willing to keep you updated on your progress.  You need to make sure that they are doing what they agreed to do and are moving forward.  You don’t want to be paying for a service that’s not getting done, so make sure you get updated at least once per month.

• Limited Repair.  Any company that you choose should be working on your credit from all angles.  If they are only working with the credit bureaus, you may want to find a company that will be more detailed.  There are plenty of companies that will work with your creditors and collection agencies, as well as the credit bureaus.

While fraudulent credit repair companies have almost ruined the reputation of the credit repair industry, there still are several good companies out there.  You just have to be willing to do a little research on the companies first.  The time you take to do this could save you a lot of money and headaches in the long run.