Trying to choose a credit repair service can be a little overwhelming since there are so many out there. This article will help you narrow down your options by outlining what you should be looking for in a good credit repair company.
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. [Read more…]