Your credit score isn’t where you’d like it to be. In fact, it’s holding you back.

Perhaps you’re dealing with a few small collections accounts, which continue to drag down your FICO score. Or, maybe it is much more serious. 

Your car was repossessed, and a few credit cards were charged off. Let’s say those debts were sold to a debt buyer, who is persistently calling you, and threatening to file a lawsuit.

If these accounts were removed from your credit reports, you know your score would be higher. Buying your first home would be possible. So would purchasing a vehicle, without being ripped off with outrageous monthly payments. 

You’re thinking it could make sense to hire a professional, who can help you with your credit. After all, you’re not sure where to begin – so you could use some help.

There are many credit repair firms out there. As with any industry, some of them are excellent. Others are not. How do you choose a good one?

Below, we’ve shared a few questions we ourselves would ask, if we were hiring someone to assist with our credit. We think you’ll find these useful. 

Yes, we run a credit repair company. These questions are based on our experiences, and those of our customers.

1. What Are Your Qualifications & Expertise Around Credit Repair?

There aren’t many formal requirements or barriers to becoming a credit repair professional. There’s no school one must attend, and no exam they must pass. 

For this reason, it is very important that you find out exactly what qualifications a credit repair company brings to the table. Why should you hire them?

First, you should inquire as to how long the firm has been in business. A company which has been around for many years isn’t always better – but it can be something to consider. After all, the fact that they’ve been in business for a while says something.

Next, you should find out what sort of training the founders of the company had, to get into credit repair. Are they attorneys, or perhaps paralegals? Do they have a financial background, say, as an accountant, financial advisor, or mortgage lender? 

Since credit repair involves legal and financial matters, ideally, you’ll find someone with a legal or financial background. Again, we’ll admit, perhaps we’re a bit biased. The founding team of our company includes a credit repair attorney, and a mortgage lender. Whoever you choose to work with, make sure that they have real expertise in these sorts of matters.

2. Are You Licensed & Bonded?

In many states, credit repair firms must register. Often, they must also obtain a bond, which protects consumers in the event you engage in some sort of misconduct.

If you’re going to work with a credit repair firm, you’ll want to make sure that they’re in compliance with all legal requirements. After all, would you visit a doctor or dentists who wasn’t licensed by your state? We’re guessing not.

If you’re not sure what the bond and licensing requirements are in your state, visit this link to find out. Keep in mind that some excellent credit repair companies operate in many different states, and might not be located in your state. 

As long as they have a strong reputation, and are  in compliance with the laws, it shouldn’t be a big issue if a company isn’t local to you. After all, you aren’t likely to be visiting the company, throughout the course of your credit repair process.

3. Does Your Company Have A Good Reputation?

You can’t learn everything about a company from what others say about them. Yet, customer reviews do have value. There is some wisdom in the experiences of a large group of people.

You’ll want to check Yelp, Google, and Facebook for reviews of any credit repair company which you’re thinking about hiring. Even better, if you have a friend or relative who utilized a particular company’s services, that is very useful. After all, a friend or relative has little reason to mislead you.

If you’re able to find a company with a strong reputation, then you’re very much on track. Keep in mind that it can take a while to locate a reputable credit repair company. Once you do, however, things get easier.

4. How Much Do You Charge? 

Once you start shopping for credit repair services, you’ll find there are many different pricing structures. Some companies charge a monthly fee. For each month that you’re a part of their program, you’ll pay a fee. If you cancel the program, your payments will stop. This is commonly referred to as the monthly fee model. 

Other companies charge only for results delivered, i.e. negative items deleted. Let’s say that you have a few collections accounts on your credit reports. These companies will typically charge you for each collection account that is deleted. Often, they’ll also have a setup or initiation fee. This model is known as pay per delete. 

Some companies charge a flat fee. With these firms, you’re going to pay a fixed amount, either based on how many negative items are deleted, or just for the work done.

There are positives and negatives to each pricing structure. With monthly fees, you have a very clear idea of how much you are spending on a regular basis. However, you don’t necessarily know how long the credit repair process will take – and thus, how many months you’ll be paying for.

Also, it’s important to keep in mind that there’s no guarantee a negative item will be removed. In fact, by law, credit repair companies cannot promise any particular result. Therefore, it is possible that you’ll pay monthly fees, and have few results to show for it.

Monthly fees have both advantages and disadvantages. Monthly fee plans often require less to get started (up front), as compared to pay per delete or flat fee plans. They often also have a fixed time duration, meaning, the program might be capped at 6 months of fees. Of course, this isn’t true of all programs.

The biggest disadvantage of monthly fees is that there’s no guarantee negative items are removed. If information on your credit reports meets all the legal requirements of being accurate, verifiable, complete and timely, it can legally remain on your credit reports. Credit repair companies are forbidden from promising to remove any negative item. Therefore, it’s possible that you’ll pay for credit repair, and see few results. 

Pay per delete has a unique advantage, in that you’re only paying for the results you see. If a credit repair company is unable to remove a negative item from your credit reports, then you won’t pay. Given the uncertainty of addressing some negative items on your credit reports, it can make sense to use a model where you only pay for the results you see.

Of course, if you have many negative items on your credit reports, and a credit repair company is able to remove them, then fees will certainly add up. However, if you’re getting results, it is often worth it.    

The flat fee model is quite useful, in that your costs are fixed. At the same time, if you see few results (i.e. few negative items deleted), then this is far less useful.

You’ll have to decide which approach you are most comfortable with. There are merits and disadvantages to each pricing model.

5. How Long Does It Take?

If you’re going through the credit repair process, you probably have a goal Perhaps you’re looking to purchase a home. Or, maybe you’re trying to improve your personal credit, so that you can obtain funding for a business.

Whatever your goal, there’s probably a timeline during which you hope to achieve it. Therefore, if you’re working with a credit repair company, you want to make sure that they’re on the same page with your goal. Again, a credit repair company cannot promise a specific result – nor can they offer a specific timeline.

However, credit repair firms do know how long it generally takes their clients to go through their program, and achieve some results. They should be able to offer guidance on how long their program is likely to take.

If a credit repair company gives you an unusually short timeline, you should be suspicious. Keep in mind that credit bureaus have 30 to 45 days to respond to any correspondence. 

In most cases, a negative item is not corrected / deleted on the first contact (with the credit bureau). Therefore, even under the most optimistic timeline, your credit repair process is likely to take 2 months.

On the longer end of things, credit repair can take as much as 8 to 9 months. If you’re dealing with severe negative credit items, such as foreclosures or auto repossessions, or have more than 5 negative accounts being worked on, this is likely to be the case.

Inquire as to how long a company thinks this will take, and make sure that you’re being offered a realistic timeline. If you are told the process will take a few months or less, you should be suspicious.

6. What Is Your Guarantee?

In credit repair, as with all business ventures, there’s potential for things to not work out. Let’s say that you hire a credit repair company to work on some negative items, and they’re unable to remove anything for you. Do they give back part of your fee? Or all of it? What’s the policy?

You’ll want to obtain clarification of this before you sign any contract with a credit repair company. Many companies have a guarantee, whereby if they’re unable to remove a single negative item, they’ll give you back all of your money. In other cases, they might retain part of what you paid.

The Final Word

Hiring a professional to help improve your credit score can be a wise move. There are effective credit repair companies out there, which have really helped people. At the same time, there are many companies which deliver few results, and charge a lot. Needless to say, you want to avoid working with these firms. 

By asking the questions listed above, you’ll gain a better idea of whether or not you should work with a particular credit repair company. If they can’t answer these questions to your satisfaction, they don’t deserve your business. If they are able to answer your objections, then maybe you should consider hiring them.