Each time you apply for a loan or credit, creditors will get your credit record for verification. Besides lending companies and banks, insurance companies and even potential employers would also want to check out your credit report.

Therefore, the need for credit repair has become highly important; especially for those who have tarnished credit records. As the demand for credit repair climbs, so does the increase in the demand for a credit repair service.

The law known as the Credit Repair Organizations Act governs a credit repair service or a credit repair organization. This federal law requires a credit repair service to fulfill particular obligations to their clients. Make sure to check out carefully any credit repair service and determine if they follow the rules.

You can determine a good credit repair service with the following:

1. Make sure to do your homework. Research a company before you go for your first visit. Get in touch with the Better Business Bureau to check out if the firm have consumer complaints and find out from your State Attorney of other state consumer agencies if there are pending legal investigations.

2. A good credit repair company should follow particular guidelines from the Credit Repair Organizations Act, which is meant to protect consumers. Make sure to receive an explanation of these rights before you sign a written contract. Read them carefully before signing.

3. Your contract should have the following information: payment terms for services, which includes the total cost, the length of time it takes to achieve results, detailed description of the services to be done, company’s name and address and other guarantees they offer.

4. Keep in mind the grace period for your contract. The credit repair company cannot perform services for you until you have signed a written contract and completed a three-day waiting period. You could cancel the contract without having to pay fees during this time.

Keep in mind that there are no quick fixes when it comes to credit repair, thus you should avoid a credit repair company that does the following:

1. Asks for a fee before services are provided, this is a direct violation of the Credit Repair Organization Act.

2. Advises you to dispute all negative entries in your report.

3. Promises to remove accurate records of judgments, bankruptcies, bad loans or liens from your file. Keep in mind that most negative information such as judgments and lawsuits for seven years or until the statute of limitations run out and bankruptcy for ten years.

4. Offers to help you establish a new credit identity, which is file segregation and is a federal and state crime. Be wary if the company tells you to apply for Employer Identification Number, which has the same number of digits as your Social Security number, then instructs you to apply for a credit using this number and a different address.

While hiring a credit repair company can help you fix your credit, keep in mind that you know your credit better, thus you should be able to choose the right credit repair company that best suits you.

Author Bio: Check out the Credit Blog or learn about the best companies with our Credit Repair Reviews.

Category: Finances
Keywords: Credit repair service, credit repair company, credit repair program