Should you hire a credit repair company?

There are a few factors to consider when looking at credit repair companies. First, you should be aware that there are regulations set forth by the FTC (Federal Trade Commission), that provide guidelines for credit repair organizations to operate. One of these guidelines stated in the CROA (Credit Repair Organizations Act) is that credit repair companies cannot charge for services until after they are rendered.

Now, there is a lot of different interpretations as to what this means. If you are shopping around, you will find that most credit repair companies are either charging for the entire amount cost of services up front, before they even start on your case, or they are charging a setup fee ($49 - $100), plus a set monthly fee ($39 - $125). Now the first case of an up front charge is clearly against the regulations, and I would suggest that you not enroll with any such company. The later method however, can be a legitimate way of conducting service. The setup fee can be justified by the amount of work involved in setting up a new client, and the monthly fee is usually charged for the previous month's work. Keep in mind that this method does not provide the company with an incentive to be successful, and this is the real problem I have with this method of charging. A company that charges a monthly fee is actually incentivised to drag the progress out and keep your monthly fee coming in as long as possible. I have heard many complaints about these companies, such as, "I have been paying my monthly fee for nearly a year now, and have not seen any progress."

If you are concerned about this, I would recommend that you hire a company that only charges for successful results. I know of only one such company that I would recommend because you will only pay for each successful deleted or corrected negative item. There are no fees of any kind, they only ask that you setup a deposit account with them so that they can bill against the account once items are removed. In this method of payment, the credit repair company is incentivised to clean up your credit as quickly as possible, because they only get paid for success. I have heard nothing but praise about this company, and I am told that most of their business is by referral. If you would like to check them out, you can find them on the web at http://www.ncacreditrepair.com