Siding Installation: Tips for making sure your contractor checks out

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(ARA) - With many Americans still focused on staying put and maximizing the value of their current homes, competition is fierce among contractors wooing homeowners for their renovation dollars. All the attention may make homeowners feel like the prettiest girl at the high school dance, but for every "nice guy" who expresses interest, a "bad boy" could be waiting in the wings to take their money and leave their jobs unfinished.

Even though the majority of contractors are honest, homeowners should be aware of the need to check a contractor's business license and the business' financial stability. Few people have money to waste these days, especially those who are already planning to invest in a home improvement or renovation project, so it is more important than ever to choose the right contractor. Here are some steps that can help you ensure you're choosing the right contractor:

Know the facts

In this economy, credit issues are common. You probably know plenty of good, hardworking people who are experiencing financial difficulties right now. It pays to check a contractor and his financial background, however, because it could directly affect his ability to get your job done. If he has limited access to credit, he may be unable to purchase the materials or hire the help he needs to complete your renovation.

Fortunately, it's easy to find online resources that can give you the inside track on a contractor's credentials. Experian, known for its credit reporting and protection services, maintains a database of more than 5 million contractors and their  businesses' information. ContractorCheck.com allows consumers to view Experian's data, which includes critical information such as:

* Company name, address and phone number
* Multiple operating addresses
* How long the company has been in business
* License, bonding and insurance information
* Contractor specialties
* A credit review that will reveal any past collection or derogatory credit events
* An easy-to-understand contractor rating

Additionally, the reports include public record information such as leins or judgments against the business. An important fact, as 8.4 percent of the contractors in Experian's database had a lien on file and 6.2 percent had a judgment filed against them.

Know the signs

While most contractors are honest and operate within the law, it pays to know the warning signs of one who is not on the up-and-up. The Federal Trade Commission offers the following tips:

Beware of contractors who solicit door-to-door, only accept cash or who don't have a phone number that is associated with a valid business. Likewise, beware of anyone who offers to discount your job because he will use materials left over from a previous job.

Avoid contractors who ask you to obtain building permits for them, or find them new customers in exchange for a discount. Acquiring necessary permits and marketing his business is part of the contractor's job - not yours.

As with virtually anything in life, if the offer seems too good to be true, it probably is. An exceptionally long guarantee or an offer to discount your job as a "demonstration," are often warning signs.

Walk away from high-pressure pitches. If a contractor wants you to make an immediate decision on hiring him, or to fund your project through his preferred lender, consider taking your business elsewhere.

It also pays to find out what other people have to say about the contractor you're considering. Just as you once checked out prospective dates by talking to friends and others who knew the person, you need to do some word-of-mouth contractor research before committing.

Ask the contractor for the names and numbers of past clients he's worked with. But keep in mind, even a reputable contractor is only going to give you contact information for customers he knows were happy with his work, so use these references as one more piece of information, but don't base your decision on them. .