Choosing a credit repair service

If you feel that you would be able to stick with a credit repair regimen better with a paid service, a credit repair service can help. However, it is important to be on your guard and to carefully evaluate your choices. Here are some things to consider before you choose a credit repair service:

• What services does the company offer? Understand that a credit repair service cannot do anything that you cannot do on your own. Carefully look at the services and watch out for companies that offer "special" services that you cannot take care of yourself. Remember that a credit repair service is more of a convenience than taking care of something that you cannot do.
• Are there claims that negative items can be removed from your credit report? This is a red flag when choosing a credit repair service. While mistakes and errors can be removed (and you can have it done yourself), accurate and timely information cannot be removed. This means that if a negative item on your credit report is accurate, it will remain there for between three and five years for things like payment information and between seven and ten years for major issues like bankruptcies and financial judgments.
• Are all fees disclosed up front? You want to make sure that all fees are disclosed up front. Compare fees between different credit repair companies. Are there service fees? Monthly fees? Administrative fees? Advance fees? Check to see what sorts of fees you will be paying.
• Watch out for claims of quick credit recovery. Sometimes a credit repair service will claim that it can help you solve your problem almost immediately. Watch out for such companies. Usually they are using tactics that may help in the short run, but will not help you in the long run. It should take between 30 and 60 days for your credit to start to see improvement. Find a credit repair service that is honest about this. Also, stay away from companies that offer to help you "create" a new credit report. Often, this is done by applying for an Employer Identification Number – something that is illegal unless you plan to actually start a business.
• Rights and legal information. Choose a credit repair service that gives you a list of your rights as a consumer, and other legal information. Also, look for an honest credit repair service that will let you know what you can do yourself for free. Stay away from services that discourage you from contacting credit bureaus yourself, or that tell you that you cannot repair your credit without third-party help.
• Look at the contract offered by the credit repair service. According to the Credit Repair Organizations Act, there is specific detailed information that services must include in your contract. Here is the information to look for in a contract with a credit repair service:

1. Total amount that the services will cost you.
2. Descriptions – in detail – of what services will be performed.
3. How long the company expects it take in order to see positive changes to your credit report.
4. Guarantees offered, in terms of seeing a positive change to your credit report.
5. The company's name and the business address and other contact information.

Make sure that you understand all of the terms and conditions of a credit repair service. It is usually a good idea to contact a knowledgeable attorney to review the contract in order to ensure that all is as it should be.

Things you can do yourself to repair your credit

While it can be nice to go through a credit repair service, the fact of the matter is that you can actually fix your own credit. Here are some things that you can do on your own to start seeing improvement in your credit report:

• Pay bills and make loan payments on time and with at least the full amount due.
• Pay down debt – especially credit card debt – as quickly as possible.
• Do not apply for new credit.
• Check for errors on your credit report and have them fixed.

Before you choose a credit repair service, consider whether it is worth it to pay someone else to do something that you are quite capable of doing for yourself.