Credit Repair Laws in Mississippi
Are you thinking about launching a credit repair business in Mississippi? Here’s everything you need to know, including the state’s credit repair laws and the best credit repair software for business.
Mississippi is, unfortunately amongst, one of the poorest states in America. A study conducted in 2015 by 24/7 Wall Street ranked it as the worst state to live in. Additionally, Mississippi has the lowest average credit score in the USA, at 681, compared to the national average of 714. Due to this, many residents are grappling with poor credit scores and seek assistance to improve their financial situation through credit repair services.
Mississippi’s Credit Health
Let’s take a look at a breakdown of Mississippi’s Average Credit versus the Total Average Credit of the United States, categorized by debt types:
Mississippi has relatively lower average debts than other states primarily because of its affordability. In fact, it ranked 7th as the most affordable state to live in in the USA.
The state has the second-lowest average mortgage debt in the country (after West Virginia). Also, it has the nation’s lowest average credit card debt at $5,134. This is significantly lower than Alaska’s average credit card debt of $8,026, the highest in the country.
However, Mississippi also has the lowest median household income at $44,966. This is just 42% of the highest median household income in Maryland, with $94,384 median household income. So, even if the state is way more affordable than others, its residents still suffer from low credit scores.
Thus, starting a credit repair business in Mississippi can significantly affect people’s financial situations. However, before you dive in, it is crucial to understand Mississippi’s credit repair laws to ensure compliance with the state’s rules and regulations.
An Overview of Credit Repair Laws in Mississippi
Credit repair laws in Mississippi aim to protect the state’s residents from fraudulent activities that may exploit consumer rights. Familiarizing yourself with these laws is essential as a credit repair specialist to establish a legitimate credit repair business in the state.
Below is a summary of the credit repair laws in Mississippi based on the state’s Debt Management Services Act.
Mississippi’s Credit Laws Licensure Requirement
1. Individuals or businesses must obtain licenses issued by the state to act as a credit repair service provider.
2. An initial license fee of $750 must be paid to the state’s commissioner for the first year, followed by an annual renewal fee of $475.
3. Unable to pay the annual renewal fee before December 31st of each year will result in cancellation or expiration of the credit repair business license.
4. The license to operate must be issued by the state’s commissioner within 30 days from the day the application was accepted.
5. The commissioner will provide a written notice explaining the reasons for the denial if the application is denied.
Mississippi Credit Repair Laws Surety Bond Requirement
A surety bond of $50,000 is required by the state before providing any credit repair services. This aims to safeguard consumers against fraud and abuse.
Contract Requirement Under Credit Repair Laws in Mississippi
A complete written agreement outlining the services must be provided to the consumer by the credit repair company before providing any services.
The credit repair consumer and service provider’s written agreement should include the following:
1. Consumer name
2. Credit repair specialist’s name
3. Credit repair business address
4. A full description of the services to be performed
5. Expected fees
6. Disclosure of the surety bond’s existence
7. Contact information of the Department of Banking and Consumer Finance of Mississippi. For any questions or complaints of the consumer.
8. Attachment of notice of cancellation
9. Notice authorizing the disclosure of financial records related to escrow accounts by the federally insured institution to the state commissioner during examinations of the credit repair specialist.
Allowed Fees Charged to the Consumer Under Mississippi Credit Laws:
1. One-time fee not exceeding $75.
2. Maintenance fee not exceeding $30 monthly after the initial counseling session.
3. Fee for obtaining a consumer’s credit report should be at most $15 for an individual report or $25 for a joint report.
4. Fee of, at most, $50 for educational courses or products that help consumers improve their credit status.
5. Bankruptcy consultation fee. It should be at most $50 per consumer.
Prohibited Acts Under Mississippi Credit Repair Laws
No person or credit repair business in Mississippi is allowed to:
1. Operate without a written agreement signed and given to the consumer
2. Buy the debt of a consumer
3. Obtain the property of a consumer
4. Lend money to a consumer
5. Operate as a debt collector, or
6. Make false claims regarding the services that will negatively amortize the consumer’s obligation to creditors.
*Disclaimer: While we strive to provide accurate information regarding Mississippi’s credit repair laws, please be aware that laws may change anytime. We recommend conducting further research or consulting a lawyer to understand credit repair service laws comprehensively.
Whether you are a consumer or credit repair consultant, you must be well-versed in your rights and responsibilities under credit repair laws in Mississippi. Familiarizing yourself with the relevant laws will safeguard you from potential fraud or legal complications as a business owner.
If you are yet to start a credit repair business in USA, here’s an article to guide you through the process of being a credit repair consultant.
THE BEST CREDIT REPAIR SOLUTION
Whether you are looking for a software to fix your own credit, starting a credit repair business, or expanding your business to accommodate unlimited clients, we got you covered.
Navigate the map to read credit repair laws in other states.