Credit repair companies are legally required to:

1) provide a copy of the "Consumer Credit File Rights Under State and Federal Law" prior to an individual signing any contract with them.

2) provide a written contract that clearly spells out your rights and obligations.

Read these documents carefully and understand their contents fully before signing the contract.

As well, credit repair companies cannot:

1) make false claims about their abilities, qualifications or services

2) charge a consumer any fees until the services have been completed

3) provide their services until after an individual has signed their written contract

4) complete any services until after the three day waiting period AFTER the signing of the written contract has expired

Any contract an individual signs with a credit repair company must include:

1) all payment terms, including a total cost for all services

2) expected length of time that will be required to achieve results

3) concise description of the services to be given

4) any and all guarantees they offer

5) the credit repair company's name

6) the credit repair company's address

Many states have additional legal obligations for credit repair companies. Contact your state's consumer credit affairs office or State Attorney General for additional information.

Those companies that provide free online credit evaluations or no-obligation credit consults by telephone are often a great starting point to assess the credit repair company you're choosing.

Learn more about credit repair services here.

The Federal Trade Commission offers extensive information and warnings about credit repair companies. The Consumer Action group offers an alerts page about potential credit repair scams.