As is the case with mechanics, chefs, plumbers, and every other profession, there are good credit repair companies and companies to avoid. Below are some tips for identifying a company you can trust.

1. Look for how long the company has been in business. Credit correction is a booming industry with many new entrants coming and going. Try to select a company with a solid foundation that you know will be there for you in the long run. The last thing you want is for the company to go away before they are done helping you.

2. Look for full disclosure. There is nothing a credit repair company can do for you that you cannot do for yourself. In fact, credit repair companies are required by law to make you aware of this fact via a written statement titled "Consumer Credit File Rights Under State and Federal Law" when you sign up. Make sure you are presented with this document.

In addition, note that credit repair services cannot be guaranteed to work because ultimately, whether or not something gets removed from your credit reports is up to the credit bureaus and your individual creditors. Watch out for organizations that guarantee to raise your credit rating or get you approved for a loan.

3. Make sure the billing policy follows the rules. By law, credit repair companies are not allowed to collect any payment before performing the agreed upon services. This is to protect people from scammers who would promise to clean up their credit report for an upfront fee (often times charging thousands of dollars) and then disappear as soon as the payment was received. It is because of this regulation that most credit repair providers charge a modest fee for creating your account (you should not be charged immediately and will in many cases not be charged for a few days), and a monthly fee collected after the previous month's services have been performed.

4. Know the signs of a credit repair scam. Because so many consumers are desperate to repair their credit but know relatively little about how the credit system works, scammers have set up phony credit repair clinics claiming to help people but only make the situation worse. The Credit Repair Organizations Act (CROA) was created to protect people from becoming a victim of a credit repair scam by setting rules credit repair companies must follow. Knowing these rules will help you avoid being taken advantage of.