Fees and billing tactics-A desirable credit repair agency will charge reasonable fees for their services. Beware of any that are extremely cheap; while the most expensive credit repair service is not always the best, you will generally get what you pay for if you go with the cheapest service available. You can find really good services for less than $100 per month, but steer clear of anything under $40.

Per the Credit Repair Organizations Act (CROA), credit repair companies may not charge upfront fees for their services. They can only bill you after service has been performed. However, they can charge an initial set-up/consultation fee before they begin repairing your credit. Typically, credit repair companies will bill you for the set-up fee, then a month later they will begin charging a monthly fee for services rendered the previous month. There are also a few companies that will bill you only for each negative item that is deleted from your credit reports, rather than charging a monthly fee.

What tactics does the company use to repair your credit? There is a legal way to repair credit, and there is also an illegal way. The illegal way to do it is called file segregation, which is a felony. File segregation consists of using a fake or stolen social security number to establish credit. A stolen social security number in this case would usually belong to a deceased person, and a fake SSN would usually be an employer identification number (EIN), which has the same number of digits as a social security number. Needless to say, these tactics can get you into serious trouble, so avoid any services that employ these methods. The only legal method of credit repair is disputing negative items on your credit report–with the credit bureaus, with the data furnishers, or both–in an effort to get them removed. Before committing to a credit repair service, always find out exactly how they will be repairing your credit.

Does the company provide personalized credit repair? You may have to do a little searching to find services that offer this, but it’s VERY important. To elaborate on what I mean by “personalized”, I will describe the credit repair methods commonly used by some credit repair companies, typically the ones that charge very low monthly fees. These tactics are legal, but they are terribly ineffective.

As you may know, legal credit repair consists partly of sending written disputes of derogatory items on your credit report to the credit bureaus. Some credit repair companies will send identical dispute letters to the credit bureaus over and over for every single client they have. This is a problem because per the Fair Credit Reporting Act (FCRA), the credit bureaus can legally ignore any disputes that they deem “frivolous”. So guess what happens when the credit bureaus receive hundreds or thousands of the exact same dispute letter? That’s right, all those cookie-cutter letters get tossed into the “frivolous” pile without a second look. This is why it’s crucial that your credit repair company sends unique, personalized dispute letters on your behalf.

Further, there is more to credit repair than just sending dispute letters to the credit bureaus. In order to effectively repair credit, disputes will also usually need to be initiated with the data furnishers–creditors, collection agencies, and/or courthouses. You (or a credit repair agency) will rarely get very far by disputing solely with the credit bureaus. But some credit repair services don’t take it this essential step further, or if they do, they may charge you extra for it. This is unacceptable; as I said above, disputing with data furnishers is part and parcel of effective credit repair–it should never be optional and it should always be included in the price of the service.

A good credit repair service will not make unrealistic promises or guarantees. By law, credit repair companies cannot guarantee any specific results at all. (But yes, they can still offer a refund policy in case their service doesn’t work for you.) Also, they should be honest and realistic in telling you what to expect from their services. They shouldn’t claim to be able to repair your credit overnight; in reality, it should take at least several months for most people, and they should be truthful with you about that.

Check out prospective credit repair services with the Better Business Bureau. Avoid any agencies that have unfavorable ratings or excessive customer complaints.

Post from: Credit Repair and Debt Solutions

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