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Many businesses offering credit repair charge extremely high fees, may even fail to follow through on their services, misrepresent the terms of their service, and neglect to disclose certain costs or explain the complete terms of the agreement.

Before you sign up, use the following questions to help review each company, the services they offer, and the terms of the agreement you may be entering in to. Compare several companies before choosing to do business with any organization.

Questions to Ask:

• What services are offerd by the company? Is it worth it to you to pay someone else to do something for you that you can do yourself for free? Credit repair companies cannot do anything legally to improve your credit that you cannot do for yourself.



• Does the company offer a promise to remove bad credit information from your report? No one can legally remove accurate and timely credit information from your credit history, even when that information is negative. Only incorrect or outdated information can be changed, amended, or corrected.



• Does the company disclose their fee-schedule and cost of service freely and entirely, including monthly fees, per-service fees, and other costs? Is there an advance-fee required before they will take your case?



• Does the company promise an unrealistically quick resolution to your credit problem? In reality, only time coupled with a consistent effort to repay your debts can significantly improve your credit report.



• Does the company clearly disclose your legal rights, along with information about what you can do for yourself for free?



• Does the company discourage you from contacting a credit bureau on your own, or prevent you from doing so?



• Does the company recommend that you try to invent a "new" credit report by applying for an Employer Identification Number to use instead of your Social Security number? This solution is not legal - it is a federal crime to receive an Employer Identification Number from the IRS under false pretenses.



• Does the company advise you to take any action that seems questionable or illegal, such as disputing all information in your credit report or creating a new credit identity? If you commit fraud by following illegal advice, you may be subject to prosecution.



• Does the service contract include specific information about: 1) the total cost of payment for services; 2) detailed descriptions of all services that will be performed; 3) how long it will take to achieve results; 4) any guarantees they offer; and 5) the company's name and business address? The Credit Repair Organizations Act requires that this detailed information is included in your contract. Read the contract carefully to make sure the contract clearly explains all required information, and that you understand all terms of your agreement.

There are an ever-increasing number of credit agencies offering too-good-to-be-true solutions to your financial problems. But remember, if it sounds too good to be true, it probably is!

See our article "How to Choose the Right Financial Service" for more helpful suggestions.

Visit the Federal Trade Commision's site at www.ftc.gov for additional information regarding financial services.

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