If you have a large amount of debt, it can be extremely attractive to hear someone tell you that they are able to solve all your debt problems if you just sign your name on the dotted line. And that is the large part of the allure of credit repair agencies that operate across the U.S.

The unfortunate reality, however, is that even though they pitch a good game, when it comes to actually delivering on the promises that they have made, credit repair agencies have a less than stellar reputation. In fact, at one time, their collective reputation was so bad that the federal government had to create the Credit Repair Organization Act in an effort to control some of the more egregious acts that these companies were engaged in.

In particular, the act creates guidelines and regulations that credit repair agencies have to adhere to if they want to stay on the good side of the law. Since it has been enacted it has not eliminated all of the shenanigans of the agencies, but for the most part it has helped to protect consumers from many of the deceptive advertising practices of the past.

This is a perfect example of where government regulation actually helps the consumer. For example, a really great feature of the law is that these agencies cannot take any payment from you before they have actually performed work on your behalf. Also, the law provides for a cooling off period after signing the contract. You have three days to change your mind and nullify the contract if, after you think it over, you decide that it is not for you.

Credit agency pitches can be very persuasive. The goals of these credit repair agencies is to sell their services. They have superior salespeople, and its not unusual for one to get you to sign a contract in the midst of the sales person telling them all the good things that will happen to them if they do.

Truthfully, however, it is a very rare circumstance in which you may really need the help of a credit repair agency. Anything a credit repair agency can do, you can do just as well on your own. But it takes hard work and a lot of negotiation with creditors. Many consumers flock to credit repair agencies because they simply hate dealing with creditors and they hate negotiating.

But if you do happen to be someone like this, then it may be well worth it to deal with such an agency. Just be sure that the company that you are dealing with has a good reputation and is honest with you about what it can do.

With credit repair agencies, it is important to do your due diligence. Prior to signing with any such agency, there are two things that you should do. Contact the office of the Attorney General in your state to satisfy yourself that they have no legal actions against them. And, ask the agency for references of people with whom they have worked to reduce debt. And call these references to find out their experience with the company.