CREDIT REPAIR LAWS IN CALIFORNIA
California is a wealthy state but also top when it comes to debts. As a result, many of its consumers need help 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 in 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’s $72,108 median household income.
Many Californians enjoy lavish lifestyles (like Florida), but this does not mean they are debt-free. In fact, 11.8% of California’s residents live below the poverty line. Moreover, it ranks in the top 10 in terms of mortgage credit. In addition, it carries the highest overall credit card debt of more than $116 billion, 11.5% of the country’s over $1 trillion credit card debt. Overall, the state has an average credit score of 680.
California’s Credit Health
Like other states of America, California indeed needs help to fix its credit. Many Californians’ are seeking credit repair services to restore their credit and quality for loans, leases, insurance, etc. Suppose you are interested in building a credit repair business in the state. In that case, one of the most important things you should learn is the credit repair law in California.
Overview of Credit Repair Laws California
The following rules and regulations are under the “Credit Services Act of 1984” written to provide the consumers of credit repair companies with the information necessary to make an informed decision regarding the service purchase. In addition, this act aims to protect the residents of California against unfair and deceptive advertising and business practices.
Prohibited Acts under Credit Repair Laws California
- A 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 using a different name, address, SS number, or employment number is against the law.
- A credit repair company cannot use untrue or misleading representations in offering or selling 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 their knowledge.
Information Statement under California Credit Repair Law
- The credit repair company shall give the buyer a written 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 two 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.
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.
Want to Start a Credit Repair Business in Florida?
Here are some Frequently Asked Questions on how to start a credit repair business in Florida.
1. What is the required surety bond to start a credit repair business in California?
Credit repair organizations in California were required to obtain a surety bond of $100,000. This bond is mandated by the Credit Services Act (California Civil Code Section 1789.17) and is intended to protect consumers from any potential misconduct or negligence by credit repair organizations.
2. Do I need to register my credit repair business in California? A registration of the credit repair business at the Department of Justice in California.
Yes. Like many other businesses, it is required to register your credit repair business in the state before performing any services.
3. Where to register a credit repair business in California?
You should file a registration of your credit repair business at the Department of Justice in California.
4. How much is the registration fee for a credit repair business in California?
The registration fee is $100.
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