Legitimate credit repair companies charge a fee to dispute late accounts and other negative items in an attempt to get them removed from your credit reports. They may be more efficient at fixing your credit rating because they have experience finding obscure but legitimate reasons for disputes. It may be worth the price if you want this expertise or simply don't have time to do a thorough credit report review and write disputes yourself.
Step 1
Check the Better Business Bureau rating for the repair company you plan to use, advises Bankrate columnist Dani Arthur. It should not be lower than A or B, as companies with lower scores are not responsive to resolving complaints. Beware if the company is not listed at all. This could mean it is new and has little or no experience or that it has changed its name because of prior bad reports.
Step 2
Check with the Federal Trade Commission to see if the company has ever been investigated for its business practices. The FTC regularly pursues companies that are believed to be engaging in illegal activity.
Step 3
Ask the repair company what it believes it can do for you and how it will accomplish this. Steve Rhode, president of nonprofit credit help company Myesta, explains that a majority of consumers have outdated information or negative errors on at least one of their credit reports. Repair companies can assist with removing it legally. However, unscrupulous companies may propose filing false disputes or applying for an Employer Identification Number to use in place of your Social Security number. These tactics are illegal and could get you in trouble.
Step 4
Ask the repair company how much it will charge you to fix your credit rating and when it expects you to make your payment. The Credit Repair Organizations Act prohibits it from making you pay before it renders its services.
Step 5
Read through the contract carefully before signing it. Make sure it includes the fees, payment date and a list of what the repair company will do for you to fix your credit rating. Do not sign if something is missing until the company adds it. Do not work with a repair company that will not enter into a written contract.
Step 6
Promptly provide any documentation the repair company requests. It may be able to file the disputes without any assistance from you, but it may ask for documents to prove certain mistakes. Give the proof quickly so it can send the disputes as soon as possible. It takes 30 days from the day the credit bureaus get the disputes for your credit rating to be fixed.
Tips and Warnings
- The Credit Repair Organizations Act gives you the right to cancel your contract with the credit repair company within three business days. Exercise this right if you discover you've signed up with a questionable repair company. Complain to the Federal Trade Commission if the company won't honor your cancellation.
- It is very challenging to find a trustworthy repair company, according to the FTC.
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