Investing in a credit repair service to improve your credit score can be tricky. 

There are dozens of services to choose from, but considering there are no licensing requirements or certifications to pass, just about anyone can open a credit repair company and claim to be an expert.  The last thing you want is to get scammed just trying to fix credit.

Still, the rewards far out weigh the risks.  A higher credit score means lower credit card interest rates, lower mortgage payments, lower home owner and car insurance premiums, and it can even help you get a better job.  It's estimated that a credit score increase of just 50 points would decrease your monthly payments by $400 a month on average.  And let's not forget to mention avoiding the potential embarrassment that comes with having to show someone your ugly credit report.

The following report will help you to determine which credit repair service is the right solution for your specific credit challenges, as well as help minimize your odds of being ripped off.

The Game Plan

Whenever you have to make any major decision in life, like which car to buy, where to invest your money, or what type of health insurance is right for you, its a good idea to first make a list of the features and benefits that are most important to you.  You wouldn't even look at a gas guzzling 8 cylinder truck if your main concern was gas mileage, right?  So let's approach this task with the same common sense.

1. How quickly do you want your credit fixed?

If you're in the process of making a major purchase like a house or car, if you plan on interviewing for a job, need security clearance for an existing job, or if you need a business loan to expand your business, like a majority of my clients, then your need for results is urgent.  If that's the case, you're better off hiring a service that guarantees to fix credit over a predetermined period of time. 

Law firms and credit repair services that charge small monthly fees do not fit this criteria.  Those services intend to fix credit slowly, so that you'll keep sending your monthly check.  Regardless of what they tell you on the telephone, if they won't guarantee results by a deadline in writing, then find another service. 

2. How much can you afford?

How much does it cost to fix credit scores?  That's an important question.  Consider this...Are you wearing the cheapest shirt you could find at the store?  No?  How about those pants?  Are they second hand?  Probably not. 

The point I'm making is if you didn't buy the cheapest shirt or pants you could find, then it wouldn't make sense to hire the cheapest credit repair service either.  Why? Because neither your shirt or pants are likely to cost you a better job, a nicer car, or a home loan, but your credit score sure can, so it makes sense that you should invest in the best credit repair service you can afford.

Credit repair services come in all shapes and sizes.  Some will charge as little as $200, while others command $3,000-$5,000.  Personally, I would never recommend any service that charges less than $600.  Those types of services are generally dispute mills.  They churn out template dispute letters week after week hoping that some of the items on your credit report fall off out of sheer volume. Any trained monkey can do that.

The worst part is once you've made it known to them you're unhappy with your credit, and you've hired a dispute mill to handle it for you, there is little left anyone can do.  Credit repair must be done right the first time for maximum effect.

Unless your case is one for the Supreme Court, you probably don't need a $350 an hour consumer advocate attorney to handle it for you.  The best services are in the midrange of $800-$2500 and most offer payment plans. The fee may vary depending on the amount of work to be done.  Someone with a severely damaged credit report should expect to pay more than someone who is attempting to remove a few blemishes.

3. What do you get for your money?

The credit repair process is much more than mailing dispute letters to the credit bureaus. 

When interviewing your credit repair service, find out how they fix credit reports.  What separates them from their competition?  If you hear a lot of legal mumbo jumbo, like, "We contact the credit bureau's legal department and under article 33 subdivision 122 blah blah blah..." they're probably just scamming you.

If they tell you they mail out a round of disputes a week, then they're a dispute mill and not worth the investment.

If they tell you they enforce the Fair Credit Reporting Act, Fair Debt Collection Practices Act, and adhere to the Credit Repair Organizations Act, then you're on solid ground.

Now take it further and get a list of the services they'll provide for you. 

	Do they offer a credit consultation to determine if you're a good candidate or do they just want your money?
	Will they attempt to verify and validate negative items on your credit report that may be inaccurate?
	Will they document their disputes and requests with certified mail?
	Will they negotiate the settlement of unpaid collections for deletion or pennies on the dollar?
	Will they attempt to remove unauthorized inquiries?
	Will they coach you on how to establish a positive credit history?
	Can you follow your progress online?
	Can you speak with someone if you have questions?

If they answer yes to all of the above, you're talking to a professional.

4. Do they have a money back guarantee?

Never trust any credit repair service that isn't willing to refund your investment if they fail to deliver the results they promised.  A guarantee that states "We guarantee you'll have a 720 score or we'll keep working your credit for free until you do" is as worthless as the paper it's written on.  That statement just means you don't get your money back...ever.  No one can guarantee you a score.

Their guarantee should state on your contract in plain English the kind of results expected, how long until you see them, and that you get your money back if they fail to deliver on either. 

Only trust what they put in writing.

5. Can they show proof of their results?

Any reputable credit repair service will be able to show you actual updates from the credit bureaus as well as before and after shots of full credit reports documenting their success at fixing credit.  The better services will have actual testimonials from clients who were so happy with their results they felt compelled to share their experience with others.

Can testimonials and other documents be faked?  Sure, but it's illegal. 

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6. How do they take payment?

I always encourage my own clients to pay by credit card whenever possible.  The credit card protects us both.  If you ever see a charge on your card that you don't recognize or you are charged for a product or service that was never delivered, you can simply call and dispute the charge.

If the seller of the product or service can't prove the product or service was delivered, you'll get your money back 100% of the time.

Now if a credit repair service insists you pay by cash or bank check, run for the door and never look back.

Brought to you courtesy of Brian Diez, president of ScoreMoreCredit.com