Credit Repair Companies ChecklistSelecting a credit repair company is hard. You can't go down to the store and compare them side by side. You can't try out a handful of different ones for a few weeks and see what works best for you. You can't even trust most of the reviews sites out there since they are almost all operated by affiliate marketers who get paid for their reviews or in some cases, secretly by the very companies they are pretending to review.
So how can you choose? Your best bet is to take the time to properly research what credit repair is and how credit repair companies work. This will give you a better understanding of what to expect and if credit repair is really a good option for you. Then you will be in a better position to identify which credit repair companies would be a good fit for your needs.
To help with this process, here are six additional things to look for in a good credit repair company that you may not have considered and will help weed out the good from the bad. A company that demonstrates all six traits in likely one you can trust and while there may be quality companies that fall short in one or two areas, more often than not, a company that doesn't score a 6 out of 6 should be crossed off your list.
BBB Profile with 0 Unresolved Complaints
BBB reports for credit repair companies can be tricky because many local BBBs do not like the idea of paying for credit repair services. Despite the fact that credit repair has become a mature and well regulated industry, many BBBs will give a company an F rating simply because they provide credit repair services regardless of the status of the other rating factors such as length of time in business and complaints. Because of this bias, BBB ratings for credit repair companies are not particularly useful.
The same can be said for number of complaints. The BBB provides a gross number of complaints for each business but gives no indication of how many people have received services from the company making it impossible to compare one company to another. Sure, Company A may have 10 times as many complaints as Company B, but if Company A provides services to 100 times as many people then they actually have a lower rate of complaints.
Total number of complaints is not a good measure, but total unresolved complaints is. Each complaint that gets submitted to the BBB gets tallied on the site and then sent to the company that is being complained about. A company that cares about their image and the satisfaction of their customers (ie. the kind of credit repair company you want to use) will make an effort to resolve each of these complaints. Unresolved complaints are a warning signs that the company cannot resolve the complaints, does not care to work with disgruntled customers, or cannot be located by the BBB – all of which are bad for consumers.
Of course, if a company does not have a BBB profile, this should also be considered a warning sign. It is by no means a guarantee that the company is up to no good, but it can be an indication that the company is either very new or very small.
Brick and Mortar Location
With something as important as your credit score, you want a credit repair company you can count on to be there for you down the road. You want a company that is not going to go out of business before they can finish the job.
A company that makes the commitment to purchase or rent an office space (or retail space), fill it with employees, put a sign on the building, and get their name in the phone book is one that you can feel confident is planning to stick around for a while. They are not trying to fly under the radar and make it possible for them to evade you or the authorities once they have your money. There is a peace of mind knowing there are real people in a real building working on your credit reports.
Before signing up with a credit repair company, try to find a mailing address for the company (not a PO Box). Check out the address using Google Maps or some other tool with satellite imagery. If possible, zoom all the way into street view so you can get a good look at the building. Can you see a sign for the company? Is it in a good part of town or an industrial park? Is it an office building or a personal residence? Most importantly, are you willing to send your hard earned money and sensitive personal information to this place?
Secure Sign-up Pages
The Internet has enabled the flow of information like no other medium before it which is a powerful tool that when wielded carelessly can have very negative consequences. Part of the responsibility of a company that operates online is to ensure the safety of your information. Any company that requests sensitive personal information online such as you social security or credit card number needs to make sure that information is submitted via a secured online form.
You will be able to tell that a web page is secure because the address will start with https (instead of the usual http) and there will be a padlock or other similar icon on your browser. If the page is not secure, whatever information you submit is at risk for being intercepted by someone other than the intended party.
Especially in the credit repair industry where one of the major causes for credit reporting errors is identity theft, you should expect a company to value your information enough to take the necessary steps to protect it.
Online Credit Card Processing
Even if you don't plan on paying by credit card, it is a good sign when a company is able to process them. Being able to accept credit cards online requires that a company jump through a number of hoops to demonstrate its legitimacy since a credit card processing company isn't going to want to be associated with a company that is out to defraud customers. You should feel an added level of confidence when working with a company that done so.
Additionally, it is a good sign when a company accepts credit cards as a form of payment because of the fraud measures that are included with most credit cards. When accepting a credit card, the company realizes that if they do not provide agreed upon services, not only can the payments be returned, but if enough charge-backs are requested, the credit card processing company may freeze the company's funds and stop allowing credit card transactions.
When a credit repair company only accept cash, checks, or money orders, it should be a red flag. It may not be a guarantee that the company is up to no good, but especially if they also fail on other items on this checklist, it's certainly reason for doubt.
Telephone Number Answered by a Live Person
The website may be professional and informative, and the price may be just right, but before you sign up you'll want to make sure there will be someone to talk to if you have any question or problems.
These days, creating a credit repair company is remarkably easy. For a few hundred dollars, anyone can purchase software they can use to build a website, create customer accounts, and draft dispute letters. With a little experience, you could be running a credit repair company from your own home in a matter of weeks that looks as legitimate as most of the other sites out there.
So how can you tell if you are dealing with an experienced credit repair company and not an overnight, out of the box, let's see if we can make a little cash enterprise. Along with using the other items on this checklist, give them a call. Talk to their rep until you are confident that they know what they are talking about. Ask questions and make them give you satisfactory answers. Make sure you understand exactly what they will do for you and don't let them hide behind "proprietary methods" and "insider information".
And if they don't have a phone number? Simple. Move on.
No "New Credit Report"
Creating a clean new credit file to be used in place of one filled with negative information such as a bankruptcy or foreclosure, a practice known as "file segregation", not only doesn't work as well as you would think it would since no credit (an empty credit report) does not make for a good credit score, but it is illegal. Undeterred, there are still a few so called credit repair companies who claim to be able to help you get a brand new credit report.
Unlike some of the other things on this list, a company that offers a new credit report as part of their services should be avoided at all costs.