CREDIT REPAIR LAWS IN CALIFORNIA

California is a wealthy state but also top when it comes to debts. Many of its consumers struggle to improve their credit scores. This gives a great opportunity for credit repair business owners. The government set guidelines for these companies to protect the consumers with the credit repair laws California.

California is one of the wealthiest states in America, with a GSP (gross state product) of more than $3 trillion. It is the home of 1.14 millionaires in the United States. Which is 8.51% of all millionaires in the entire country. This makes California the top state with the highest number of millionaire households. Next in line is Texas which holds 6.32%. The median household income in the state is $80,400. This is much higher than New York with a $72,108 median household income.

Many Californians enjoy lavish lifestyles, but this does not mean that they are free of debts. 11.8% of the residents in California are living below the poverty line. The state has an average credit score of 680. It ranks in the top 10 in terms of mortgage credit. And it carries the highest overall credit card debt of more than $116 billion. Which is 11.5% of the country’s over $1 trillion credit card debt. 

California’s Credit Health

California's Average Credit

Like other states of America, California indeed need help to fix its credit. Many Californians’ are seeking for credit repair services to restore their credit and quality for loans, leases, insurance, etc. If you are interested to build a credit repair business in the state, one of the most important things you should learn is the credit repair law in California.

Credit Repair Laws California

The following rules and regulations are under the “Credit Services Act of 1984” which is written to provide the consumers of credit repair companies with the information necessary to make an informed decision regarding the purchase of the service. This act aims to protect the residents of California against unfair and deceptive advertising and business practices.

Prohibited Acts under Credit Repair Laws California

  • Credit Repair Law CaliforniaA credit repair company shall not receive or charge any money or other valuable consideration before the completeness of the services to be performed for or on behalf of the consumer.
  • A credit repair service provider should complete the agreed services within 6 months from the date the buyer signed the contract of agreement.
  • No person, company, or service provider shall receive money for the referral of the buyer to a credit grantor who will or may extend credit for the buyer if the credit is extended to the buyer: (1) Upon the same terms as to those available to the public. (2) Upon the same terms that would have extended to the consumer without the assistance of the credit repair service provider.
  • No credit repair company must make or advise a buyer to make any untrue or misleading statement to any consumer credit reporting agency or creditor.
  • Removing information from the buyer’s credit record is prohibited.
  • Creating a new credit record by using a different name, address, SS number, or employment number is against the law.
  • A credit repair company is not allowed to use untrue or misleading representations in the offer or sale of credit repair services. Including the following: (1) Guaranteeing that the company can obtain an extension of credit regardless of the consumer’s previous credit history. Unless the representation discloses the eligibility requirements for obtaining a credit extension. (2) Guaranteeing to delete adverse credit history, unless it is inaccurate or obsolete.
  • Engage in fraud or deception to offer services that claim to help fix credit.
  • Providing credit repair services without being registered to the department of justice.
  • A credit repair company is not allowed to transfer its certificate of registration
  • A credit repair service provider shall not submit a buyer’s credit dispute to any consumer credit reporting agency without his/her knowledge. 
  • Using a credit reporting agency’s telephone system or number to represent a caller as the buyer submitting a credit dispute is strictly prohibited.

Information Statement under California Credit Repair Law

  • The credit repair company shall give the buyer a writing statement containing all the information required by section 1789.15 of the Credit Services Act of 1984.
  • The credit repair service provider shall maintain the exact copy of the statement with the buyer’s signature for 2 years.

Contract Requirements under the Credit Repair Laws California

Before the performance of services, the credit repair company shall provide a written contract that complies with section 1789.16 of this act. The contract shall be dated and signed by the consumer. 

**Disclaimer: We do our best to provide the most accurate information about the credit repair law in California. However, please note that laws may be amended anytime. We recommended doing further research or asking a professional legal advisor to learn more about this matter.

Credit repair companies have a significant impact in the state of California, USA. They are of great help to the people of the state; especially those who want to improve their credit score, have limited economic means, and are inexperienced in credit matters. Many Californians are seeking assistance to fix their credit. That is why it is great to build a credit repair business in this state. 

Requirements to Build a Credit Repair Company in California

How to Start a credit repair business in California?

  1. Acquire a surety bond with the principal amount of $100,000. 

    This is for the benefit of any person who is damaged by violating the California credit repair law. The surety bond shall be maintained for 2 years following the date on which the business ceases to operate in the state.

  2. A registration of the credit repair business at the Department of Justice in California.

    Like many other businesses, it is required to register your credit repair business in the state before performing any services. The registration fee is $100.

  3. Get credit repair software for record-keeping and running business processes smoothly.

    Here is one of the best credit repair softwareyou can find today. It is trusted by many businesses and professionals internationally for 30 years.