Credit repair law is made to protect the residences of all states in American from fraud and deceptive credit repair companies. Learn your rights to avoid falling from scams.
A good credit score is important for every residents of the United States of America. This is because businesses evaluate your credit history when you apply for credit, insurance, lease, or even for employment. Everyone are trying their best to maintain a good credit score as bad credit or having credit delinquencies can result to higher interest rates, few loan options, difficulty in finding a house, and acquiring certain services. In some cases, it can also affect your job hunting.
However, there are inevitable things that can cause credit problems. Temporary losses of income, business bankruptcy, an illness, or a divorce are just few examples that can lead to a bad credit score. This is why many people are seeking help for credit restoration and improving their credit score. There are many credit repair companies that offers credit repair and fix credit dispute. Which many people find helpful as it is less stress on their part. Unfortunately, there are bad individuals who use this supposedly helpful service to scam other people and steal money.
That is why the United States of America has specific credit repair laws. To help prospective buyers or consumers of credit repair businesses make an informed decision regarding the purchase of such services. And to protect Americans who wish to fix their credit from unfair, deceptive and wrong business practices by some people who claim to be credit repair service providers.
The Prohibited Acts under the Credit Repair Law in USA
- No person may make any statement, counsel, or advice a consumer to make untrue or misleading statement with respect to the consumer’s credit standing, credit worthiness, or credit capacity to any person, consumer reporting agency, or creditor.
- No person may make any statement, counsel, or advice a consumer to alter the consumer’s identification to hide the consumer’s accurate credit record, history, and rating to any consumer reporting agency and creditor.
- Make or use any untrue or misleading representation of the services of the credit repair business or company.
- Engage, whether directly or indirectly, in any act, practice, or course of business that results to a fraud or deception on any consumer with regards to the services offered by the credit repair company.
- No person or credit repair company may receive payment for services before the credit repair service is fully performed.
Required Disclosures under the Credit Repair Law in USA
1. The credit repair company shall provide the consumer with the statements from the Consumer Credit File Rights under State and Federal Law before any contract or agreement between the two parties is executed.
3. The credit repair company is required to maintain a copy of the statement signed by the consumer for 2 years.
Contracts under the Law of Credit Repair in USA
1. The credit repair service provider and its consumer shall have a written contract that is signed by the consumer.
2. The terms and condition of the contract should include:
- The total amount of all payments to be made by the consumer to the credit repair company or its representative.
- A full and detailed description of the services to be performed by the company who would fix credit for the consumer. This includes the guaranteed performance, estimated date by which the credit services will be complete, the name and address of the credit repair company, a conspicuous statement in bold face type, in immediate proximity to the space reserved for the consumer’s signature on the contract, which reads as follows:
“You may cancel this contract without penalty or obligation at any time before midnight of the 3rd business day after the date on which you signed the contract. See the attached notice of cancellation form for an explanation of this right.”.
The Statute of Limitations under the Credit Repair Law in USA
1. The end of the 5-year period beginning on the date of the occurrence of the violation involved.
2. In any case in which any credit repair company has materially misrepresented any information which the credit repair organization is required to disclose to any consumer.
How to Start a Credit Repair Business?
Learning the credit repair law USA is important for both consumers and credit repair business owners. If you are starting a credit repair company, there are two most important things you should consider.
- Review the credit repair law, also known as, the credit services organization act, to ensure that you are doing business fairly and in accordance with the law. Following the rules and regulations of the country and the state is critical to avoid penalties that can drag your business to failure and bankruptcy. The United States of America has a general credit repair law that is applicable to most states. However, some states have amended the credit repair services organization act to provide more protection to their consumers. You may refer to the flags below for credit repair law by state.
- Invest in powerful credit repair software for business. This can help you organize client records, minimize workload, speed up business processes, automate generating and sending dispute letters, get credit records easily, and so much more.
Not all credit repair software is created equally. Spend your money wisely with the program that has all the tools you need to run the business. Like the Credit Money Machine Software. It has a built-in CRM program, invoicing system, emailing system, spinning program to make dispute letters unique, and so much more. Learn more about this amazing software here.