If you’ve got bad credit, you’re not alone. According to recent data from Experian, 12 percent of Americans have a FICO score below 550. Even consumers with fair credit, which includes FICO scores between 580 and 669, can have trouble taking out loans, securing mortgages or applying for new credit cards.

That can make credit repair a tempting option for many Americans—but is credit repair a scam? There are a lot of credit repair companies out there, and only some of them offer legitimate credit repair services. Here’s what you need to know about how credit repair companies work, what to expect from a reputable credit repair organization and how to spot the warning signs of a credit repair scam.

How credit repair companies work

Reputable credit repair companies help you boost your credit score over time, using standard credit repair tactics such as reviewing your credit report for inaccurate information that might be dragging your score down.

Less-reputable companies take a shadier approach. If a credit repair service claims it can give you a clean credit history, for example, that’s a scam. They might try swapping your Social Security number or offering you a new Employer Identification Number (EIN) or a “Credit Privacy Number” (CPN) in order to give you a “fresh start”—all of which are, as you can probably guess, illegal.

Scammy credit repair companies also inundate credit bureaus with questionable “dispute” claims. The move would clear the claim from your file for up to 30 days, just long enough to snare better loan terms or a credit card. These plans are unethical, and they fail to address the poor money habits that may have pushed you into serious debt in the first place.

Perhaps even more common is the do-nothing strategy. Schemers promise results, collect a fee and do nothing. When a suspicious customer checks in to see why he hasn’t seen a change in his credit score, the credit repair firm has vanished.

How much does credit repair cost?

Most credit repair services charge monthly rates, at around $75 to $100 per month. However, you might be asked to pay an account setup or “first work fee” at the beginning of the process, which can be anywhere from $20 to more than $100—and you might also be encouraged to purchase pricey add-ons such as identity theft monitoring.

Be aware that even if you are working with a legitimate credit repair company, it might take a few months before you see significant changes to your credit. Not only will it take time for the credit repair company to implement a credit-score-boosting plan, but lenders and credit bureaus also tend to work on a 30-45 day cycle. It’s worth asking a credit repair company how long it might take to boost your credit, and how many monthly payments the average user makes. If they’re a reputable company, they’ll tell you.

How to tell a credit repair scam from the real deal

If you want to know whether the credit repair company you’re considering is actually a scam, start by checking its Better Business Bureau rating. You should also check both the BBB and the Consumer Financial Protection Bureau for customer complaints—that way, you can see what other consumers have to say about a particular credit repair service. If a lot of people are filing complaints about FES credit repair scams, for example, you’ll know which company to avoid.

If the service is well-rated and looks legitimate, request to review a contract. The Credit Repair Organizations Act requires reputable credit repair companies to provide you with a contract that clearly outlines the services they offer, as well as your rights under state and federal law. If the credit repair company refuses to provide a contract or requests money up-front, it’s probably a scam.

Repair your own credit

The services offered by legitimate credit repair companies tend to be the kind of tasks you could complete on your own. A credit repair company might review your credit reports for inaccurate information and then dispute any credit report errors they find, both of which are tasks that you can easily do yourself.

Likewise, a credit repair company may suggest that you take out a new line of credit in order to lower your credit utilization ratio and boost your credit score. Since your credit score is partially determined by your total credit vs. your current debt, having more credit available to you can help your credit score improve. A secured credit card can be a good way to build your credit while simultaneously building a history of on-time payments, both of which will improve your credit score.

If you’d like to repair your credit, you’d be much better off implementing credit-building strategies on your own instead of paying someone else to do them for you. Here are some of the best ways to improve your credit:

• Make on-time payments on all of your current debt
• Pay off your outstanding balances
• Review your credit reports for errors
• Apply for a new credit card to lower your credit utilization ratio

You might also want to enroll in an alternate credit score program, like Experian Boost or UltraFICO. These programs track not only your credit history, but also other indicators of financial responsibility, such as bank deposits or utility payments.

If you don’t feel confident repairing your credit on your own, a non-profit credit counseling service might be the best option. These organizations work with you to develop a financial plan that can help you manage your debt and improve your credit over time. The U.S. Department of Justice maintains a list of reputable credit counseling services in every state, so start there.

The bottom line

Although some credit repair companies do provide legitimate services, you’ll still end up paying money for them to complete tasks that you could have done on your own. The best way to repair your credit is by practicing good credit habits such as making on-time payments and reducing your account balances. You can also consider additional credit boosting activities like taking out a new line of credit or enrolling in an alternate credit score program. If you still want an outside source to help you manage your credit, a non-profit credit counseling service is a better option than a credit repair company.