Finding A Reputable Company

You may still decide to go the credit repair service route. Here's how to let your fingers cautiously do the walking through the yellow pages.

Do your homework. Research the company before your first visit. Contact the Better Business Bureau to see if the firm has had any consumer complaints. Check with your state attorney general's office or other state consumer agencies to find out if there are any pending legal investigations. The FTC warns against relying on chambers of commerce or other trade associations where membership is based solely on a fee.

Know your rights. Credit repair services must follow specific guidelines from the Credit Repair Organizations Act, which are intended to protect consumers. You should receive an explanation of these rights before signing a written contract. Read them.

You should receive a contract with all of the following information:

The payment terms for services, including their total cost

A detailed description of the services to be performed

How long it will take to achieve the results

Any guarantees they offer

The company's name and business address

Remember the grace period. The credit repair company cannot perform any services for you until you've signed a written contract and completed a three-day waiting period. You may cancel the contract without paying any fees during this period.