Every business in the United States is granted the authority to operate a legal business for consumers to repair credit. Specialists in credit repair organizations possessed at least an occupational license to conduct ethical credit fix services according to the federal law. A local government body governs over several states & counties to prevent credit repair scams.
What is an occupational license for credit repair companies?
Spot an illegal credit repair company – a license is required for any business entities to conduct operations worldwide. Under the Credit Repair Organization Act or “CROA”, a federal regulation requires all credit repair businesses to obtain an occupational license in the financial service line. Another way is to be granted an honorary request from statutory laws.
A zoning license is needed to be submitted to relevant authorities. CROA receives a request from new startups requesting for license permit to perform credit services or financial services. A surety bond is a typical procedure on starting a credit repair business. Franchising requirement – usually under a master franchise – depends on the types of CR services rendered to clients.
Therefore, it is imperative to pay a visit to a licensed credit repair specialist clinic at a physical location such as Alabama or Utah. Any location is not a problem but do note on the licenses approved to operate a legitimate business. Tuscon  reported on Feds cracking down on ’credit-repair’ companies & services overpromising on a complete cleanup of credit problems, reduction of debt or raise credit scores by 100 points.
Note: Even licensed credit repair agencies do get fines & penalties under CROA’s laws.
Why am I making unethical payments to firms?
Legal settlements on Consumer Financial Protection Bureau (CFPB) – an appointed federal credit agent authorized to issue fines to credit repair companies conducting unethical business practices. The CFPB has charged several CR agencies for allegedly demanding upfront payments from debtors. Recent cases of making advance payments are on the rise.
According to a report from CFPB, the federal agent has received complaints from consumers mentioning on making unethical payments to firms. Generally, the bureau caught these businesses violating the Telemarketing Sales rule, attracting thousands of customers via sales calls & convincing landing pages on websites. Court settlement of violation of rules had been made.
Similarly, CFPB issued 2 legal settlements on financial crime control due to credit repair agents charging mortgage home seekers & other clients on advance payments – a type of payment made pre-service delivery. It is illegal for companies to charge advance fees before service delivery under the CROA regulation. No “set-up” or “upfront” fees are to be paid. All businesses have to give assurance on “money-back” guarantees too.
If you suspect that you’re unfairly charged illegal advance fees or felt something amiss, contact a local credit bureau near you and lodge a complaint request to the CFPB immediately. An officer will attend to your needs and advise the following procedures. Do not liaise with an unethical credit repair agent.
Note: Frauds could be resolved by the CFPB but your money may not be recovered forever.
Can credit repair companies really fix my credit?
Clean up a credit report – any items that don’t improve your credit scores or lower your scores could be removed legally. A licensed agency has the expertise to clear up any bad information or unwanted items in your credit reports. This is made possible by filing disputes in writing to relevant creditors & credit bureaus.
Credit repair companies have written many credit dispute letters similar to that of attorney-written requests. In resemblance to credit repair attorneys, re-using proven letters of disputes, professional agents replicate success for many years. Rest assure on credit repair agents being transparent during the phase of repairing bad credit.
However, avoid any customer service officers if they’re unwilling to disclose your legal rights on how to handle hard credit inquiries or learning more about the status of existing credit repair progress. Avoid companies not wanting you to contact credit bureaus or signing any documents revoking your rights to contact CFPB for financial assistance. Credit repair companies are licensed to operate & cannot “force” clients in signing unethical contracts.
Note: CFPB naturally retained control over any clauses regardless of clients signing to revoke access rights for the bureau for credit intervention – authority remains in CFPB.
How much do unethical credit repair specialists make?
National average salary in United States – a set of compilations of credit repair specialist earnings in a year. Generally, the median wage of tax credit specialist is $44,180.00 in the U.S. but subjected to various regulations. Centralized districts generated more monthly income than an agent located in suburbs. Glassdoor is a good guide to view a salary range.
On the other hand, conducting unethical credit repair practices, high-flyer agents could be found making more than $60,880.00 per annum. A professional tax credit specialist salary cannot match the median pay! Illegal credit repair agents do earn a high income! Agencies running unethical credit repair practices in their repair clinics pay high to retain officers.
Can I hire unethical credit repair specialists? To help clean up your credit reports, engaging highly unethical agents will improve your FICO scores the fastest but doing more harm than good in the long term. Home mortgage seekers employed illegal credit repair services to secure a housing grant plus additional incentives. Ended up, mortgage foreclosures occurred when home owners could not afford unplanned expenses & credit crisis.
Note: Buy what you can afford in mortgage installments and not ask unethical CR peoples.
Where is it illegal for ethical credit repair services?
Misdemeanor & illegal credit repair operations – under certain regulations in the United States and so parts of the world, business licenses had been revoked in credit repair. What does it mean to be illegal? A revocation of license means no business operation can materialize in accordance to statutory law (unless ran by professional bodies).
For example, after many attempts of helping clients to repair bad credit reports, Georgia Department of Law’s Consumer Protection Unit found out that these companies don’t live up to expectations of consumers (not the bureaus). Finally, Georgia’s law demands agencies not to provide professional credit repair services. It is against the law in Georgia for consumers to do business with regular firms in a credit-repair industry.
Note: It is perfectly fine to work with legal credit repair attorneys & lawyers, however.
Inversely, common states such as Utah, Atlanta or Alabama do welcome reputable credit repair agencies to set up bases here. It is because consumers demand for professional CR services and established businesses can be of great assistance. Most credit repair companies in the United States have long operating tenures and helped millions of debtors to get better rates.
Note: Violations of credit-repair-services led to heavy fines & license revocations, however.
Good to know about find: how to spot unethical credit repair companies
Do I qualify for ethical credit repair services? Short answer is yes. Build your credit the right way by investing time & efforts to develop a comprehensive credit repair plan. Hire a reputable agency that has permitted credit-repair licenses & a clean history of helping debtors. Remember, you’re protected under the consumer rights and consumer protection laws with the CROA & federal governments. In any case of uncomfortable dealings, contact the FTC & CFPB immediately. Reporting earlier does not hurt your credit scores and gets you out of future legal implications of an unethical credit repair company.
People also ask:
Where do I find credit repair laws by state?
What is a New York state credit repair laws?
How do I spot illegal/unethical credit repair?
Is it possible to put down 10 percent for a house?
How much can I loan for a home mortgage with a bad credit?
Why a down payment of 20 percent or more is required?
Quote of the Day: “Know the rules, boost to freedom. – KIG Hall [2013-2018]”
» Highly effective cr solutions: How to win a dispute?
» Aggressive credit repair: Challenge your creditors!
» Hire reputable credit repair companies: Who do you trust?
» What you need to know about a credit repair: Knowledge is freedom!
» Scam alerts in a credit repair: How to I prevent identity theft & scams?
This article was originally published on March 29, 2014. It has since been updated.