Credit report repair is big business and credit repair scams are everywhere. If you want to know more about improving your credit score, and don’t want to bother with disputes or inaccuracies you could consider consulting an independent credit repair company.

But how do you spot the genuine companies? You can do this by following the provisions in the Credit Repair Organizations Act. Know these signs of scammers and frauds.

1. Research the different companies and how their standards differ. If people cold contacts you, by phone or by mail, you are advised not to answer them. Even if you set up a meeting, do plenty of research before you sign anything.

2. steer clear of any company that tries to collect money from you in advance. They don’t need to be paid until after they perform their services.

3. Avoid companies that warrant fantastic results like a credit boost of 100 points. Although they can advertise the average results they have gotten for others, they can’t promise a specific increase in your credit score, since they do not control that. They can’t guarantee you anything unless they have seen your report and know your credit score and exact situation.

4. You must be informed by them of your rights to repair your credit for yourself. Unless you want to, you do not need to hire anybody. A company may not be legitimate if their written information does not inform you of this.

5. Never sign a contract that you cannot break or leave. Make sure you can cancel at any time. You don’t have to pay more than the work they had accomplished for you.

6. File segregation is something that you should avoid from any company. File segregation, which is illegal, involves making you a new credit identity.

If the credit repair company tries to talk you into file segregation, please remember that if they get caught, you get caught also. Your participation as a client is unlawful too. If one unhappy client reports them, all of their files will be examined, and it could result in trouble for their other clients… This would mean trouble for you, too.

Most people who have filed bankruptcy will most often receive letters from companies promising they can solve all their credit problems. You will be told that it’s legal, but after your new credit file is opened, anytime you apply for credit you will have to lie on the application forms. If you decide to give false information to obtain credit it is considered fraud. There are severe penalties, including monetary penalties and even prison time.

Many companies that promise credit score improvements are, in fact, legitimate. Avoiding common credit repair scams will be easy, if you remember these points.