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How to Start a Credit Repair Business


Cost of starting a credit repair business

Roughly $200

Cost to obtain the required $5,000 bond:

Roughly $50 - $500

Potential average profit

$20,000 monthly

Credit Repair Laws in Arizona

There are federal and state laws for Arizona. You should be aware of both.

Federal Laws

The Credit Repair Organizations Act (CROA) is a federal law passed in September 1996 that regulates organizations whose purpose is increasing consumer’s credit score through credit repair. One of the most important things the CROA did is make it illegal for credit repair organizations to make false claims. Don’t worry though, staying compliant is pretty easy after you get familiar with the law! This law is moderated and enforced by the Federal Trade Commission (FTC), so the FTC has the authority to close down any credit repair organizations that are operating outside the parameters of these laws (like fraudulent or illegal activities).

The main sections include mandates that:

  • You can’t misrepresent your services (no false claims about what you will do for the client and definitely no promise of working and then not doing the work).
  • You must provide a written contract between you and the client that the client signs.
  • Your clients have three days to cancel the contract.
  • You can’t charge until services are rendered (most companies will do some initial document processing and then charge the client for the work they have just done).
  • Consumers can sue and get refunded all money paid (plus legal fees and damages)  if the credit repair organization is found to have violated the CROA with that consumer.
  • State laws can’t change or render any of the CROA ineffective.

Simply put, these laws were put in place to protect people from credit repair companies using scammy business practices. As long as you’re not trying to be sketchy and scam people, you should be able to stay compliant easily!

To read the Credit Repair Organizations Act in full, visit the United States House of Representatives’ record of the act here.

State Laws

Arizona has laws that govern how to start (and run!) a credit repair business in Arizona. Here are the relevant regulations and Arizona laws governing credit repair businesses that you need to be aware of:

Arizona Credit Repair Organizations Act

Title 44. Trade and Commerce

Chapter 11. Regulations Concerning Particular Businesses
Article 7. Credit Services

§ 44-1701. Definitions

§ 44-1701. Definitions

In this article, unless the context otherwise requires:

1. "Buyer" means any natural person who is solicited to purchase or who purchases the services of a credit services organization.

2. "Credit services organization" means a person who, with respect to the extension of credit by others, sells, provides, performs or represents that he can or will sell, provide or perform any of the following services in return for the payment of monies or other valuable consideration:

(a) Improving a buyer's credit record, history or rating.

(b) Obtaining an extension of credit for a buyer.

(c) Providing advice or assistance to a buyer with regard to either subdivision (a) or (b) of this paragraph.

3. "Extension of credit" means the right to defer payment of debt or to incur debt and defer its payment, which is offered or granted primarily for personal, family or household purposes.

§ 44-1702. Exemptions

This article does not apply to:

1. A person who is organized, chartered or holding a license or authorization certificate to make loans or extensions of credit pursuant to the laws of this state or the United States and who is subject to regulation and supervision by an official or agency of this state or the United States.

2. A bank or savings and loan institution whose deposits or accounts are eligible for insurance by the federal deposit insurance corporation or the federal savings and loan insurance corporation.

3. A person licensed as a real estate broker by this state if the person is acting within the course and scope of that license.

4. A person licensed to practice law in this state if the person renders services within the course and scope of his practice as an attorney at law.

5. A broker-dealer registered with the securities and exchange commission or the commodity futures trading commission if the broker-dealer is acting within the course and scope of such regulation.

6. Any nonprofit organization exempt from taxation under § 501(c)(3) of the Internal Revenue Code.

§ 44-1702.01. Repealed by Laws 1977, Ch. 126, § 1

§ 44-1703. Credit services organizations; prohibited activities

A credit services organization and its salespersons, agents and representatives who sell or attempt to sell the services of a credit services organization shall not do any of the following:

1. Charge or receive monies or other valuable consideration before full and complete performance of the services the credit services organization has agreed to perform for or on behalf of the buyer, unless the credit services organization, in conformity with § 44-1708, has obtained a surety bond issued by a surety company authorized to do business in this state. If a credit services organization is in compliance with this paragraph, the salesperson, agents and representatives who sell the services of the organization are not required to obtain the surety bond provided for in § 44-1708.

2. Charge or receive monies or other valuable consideration solely for referral of the buyer to a retail seller who will or may extend credit to the buyer, if the credit which is or will be extended to the buyer is on substantially the same terms as those available to the general public.

3. Make or counsel or advise a buyer to make any statement which is untrue or misleading and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading to a consumer credit reporting agency or to any person who has extended credit to a buyer or to whom a buyer is applying for an extension of credit, with respect to a buyer's creditworthiness, credit standing or credit capacity.

4. Make or use any untrue or misleading representations in the offer or sale of the services of a credit services organization or engage, directly or indirectly, in an act, practice or course of business which operates or would operate as a fraud or deception on a person in connection with the offer or sale of the services of a credit services organization.

§ 44-1704. Information statement; necessity and time of delivery to buyer; acknowledgment of delivery; retention on file

Before the execution of a contract or agreement between the buyer and a credit services organization or before the receipt by the credit services organization of monies or other valuable consideration, whichever occurs first, the credit services organization shall provide the buyer with a statement, in writing, containing all the information required by § 44-1705. The credit services organization shall maintain on file or microfilm for a period of two years an exact copy of the statement, personally signed by the buyer, acknowledging receipt of a copy of the statement.

§ 44-1705. Information statement; contents

The information statement shall include all of the following:

1. A complete and accurate statement of the buyer's right to review any file on the buyer maintained by a consumer credit reporting agency and the right of the buyer to receive a copy of that file, as provided by § 44-1693. The statement shall include the approximate price the buyer will be charged by the credit reporting agency for a copy of the file.

2. A complete and accurate statement of the buyer's right to dispute the completeness or accuracy of any item contained in any file on the buyer maintained by any consumer credit reporting agency as provided by § 44-1694.

3. A complete and detailed description of the services to be performed by the credit services organization for or on behalf of the buyer and the total amount the buyer has to pay, or become obligated to pay, for the services.

4. If the credit services organization is required to obtain a surety bond pursuant to § 44-1703, the statement shall set forth both of the following:

(a) The buyer's right to proceed against the bond under the circumstances and in the manner set forth in § 44-1708.

(b) The name and address of the surety company which issued the bond.

§ 44-1706. Contracts; requirements; contents

A. Every contract between the buyer and a credit services organization for the purchase of the services of the credit services organization must be in writing, be dated, be signed by the buyer and include all of the following:

1. A conspicuous statement in size equal to at least ten point type in immediate proximity to the space reserved for the signature of the buyer as follows:

You, the buyer, may cancel this contract at any time before midnight of the third day after the date of the transaction. See the attached notice of cancellation form for an explanation of this right.

2. The terms and conditions of payment, including the total of all payments to be made by the buyer, whether to the credit services organization or to some other person.

3. A full and detailed description of the services to be performed by the credit services organization for the buyer, including all guarantees and all promises of full or partial refunds, and the estimated date by which the services are to be performed or the estimated length of time for performing the services.

4. The credit services organization's principal business address and the name and address of its agent authorized to receive service of process.

B. The contract shall be accompanied by a completed form in duplicate, entitled "Notice of Cancellation", which shall be attached to the contract and easily detachable and which shall contain in at least ten point type the following statement written in the same language as used in the contract:

Notice of Cancellation


You may cancel this contract without any penalty or obligation within three days from the date the contract is signed.

If you cancel, any payment made by you under this contract will be returned within fifteen days after receipt by the credit services organization of your cancellation notice.

To cancel this contract, mail or deliver a signed and dated copy of this cancellation notice, or any other written notice, to _______________(Name of credit services organization) at _______________(Address of credit services organization) _______________(Place of business) not later than midnight ________(Date).

I hereby cancel this transaction. ________(Date)

____________________ (Purchaser's signature)

C. A copy of the fully completed contract and all other documents the credit services organization requires the buyer to sign shall be given to the buyer at the time they are signed.

§ 44-1706.01. Repealed by Laws 1973, Ch. 74, § 6

§ 44-1707. Credit service organization's breach of contract or obligation; violation of article

The credit services organization's breach of a contract under this article or of any obligation arising from the contract constitutes a violation of this article.

§ 44-1708. Surety bond; procedures to obtain or establish; claim by action at law; limit of liability

A. If a credit services organization is required to obtain a surety bond pursuant to § 44-1703, the following procedures apply:

1. A copy of the bond shall be filed with the corporation commission.

2. The bond required shall be in favor of this state for the benefit of any person who is damaged by any violation of this article. The bond shall also be in favor of any person damaged by the practices.

3. A person claiming against the bond for a violation of this article may maintain an action at law against the credit services organization and against the surety.

B. The surety is liable only for actual damages and not the punitive damages permitted under § 44-1711. The aggregate liability of the surety to all persons damaged by a credit services organization's violation of this article shall in no event exceed the amount of the bond.

C. The bond shall be in an amount equal to five per cent of the total amount of the fees charged buyers by the credit services organization under the contracts entered into between the credit services organization and the buyers during the previous twelve months, but in no case shall the bond be less than five thousand dollars or more than twenty-five thousand dollars. The amount required shall be adjusted once a year, no later than the tenth day of the first month of the credit services organization's fiscal year.

§ 44-1709. Waiver of rights by buyer; prohibition; burden of proof on exemption or exception from article

A. A waiver by a buyer of the provisions of this article is deemed contrary to public policy and is void and unenforceable. An attempt by a credit services organization to have a buyer waive rights given by this article consitutes [FN1] a violation of this article.

B. In any proceeding involving this article the burden of proving an exemption or an exception is on the person claiming it.

[FN1] So in original. Probably should read "constitutes".


§ 44-1710. Violation; classification; enforcement

A. A person who violates § 44-1703, 44-1704, 44-1705, 44-1706 or § 44-1709, subsection A, is guilty of a class 1 misdemeanor.

B. The superior court has jurisdiction to restrain and enjoin any violation of this article.

C. The duty to institute actions for violations of this article, including proceedings to restrain and enjoin such a violation, is vested in the attorney general, county attorneys and city attorneys. The attorney general, a county attorney or a city attorney may prosecute misdemeanor actions or institute proceedings to restrain and enjoin such violations, or both.

D. This section does not prohibit the enforcement by a person of a right provided by this or any other law.

E. The class 1 misdemeanor provision of this section does not apply to a seller's breach of a contract subject to this article.

§ 44-1711. Action for recovery of damages by buyer

A buyer injured by a violation of this article or by the credit services organization's breach of a contract subject to this article may bring any action for recovery of damages. Judgment shall be entered for actual damages, but in no case less than the amount paid by the buyer to the credit services organization, plus reasonable attorney fees and costs. If the trial court deems it proper, the court may enter an award for punitive damages.

§ 44-1712. Application of other laws; remedies as additional

A. The provisions of this article are not exclusive and do not relieve the parties or the contracts subject to this article from compliance with any other applicable provision of law.

B. The remedies provided in this article for a violation of this article are in addition to any other procedures or remedies for any violation or conduct provided for in any other law.

§ 44-1712.01. Renumbered as § 32-1197

§§ 44-1713, 44-1714. Repealed by Laws 1977, Ch. 126, § 1

Current through legislation effective May 25, 2007, and also includes election results from the November 7, 2006 general election.


Findings and purpose from the Arizona Credit Repair Organizations Act

Findings and purpose from the Arizona Credit Repair Organizations Act

Laws 1988, Ch. 350, § 1, provides:

"Section 1. Findings and purpose

"A. The legislature finds and declares that:

"1. The ability to obtain and use credit has become of great importance to consumers. Consumers have a vital interest in establishing and maintaining their creditworthiness and credit standing. As a result, consumers who have experienced credit problems may seek assistance from credit services organizations which offer to obtain credit or improve the credit standing of the consumers.

"2. Certain advertising and business practices of some credit services organizations have worked a financial hardship on the people of this state, often those who are of limited economic means and inexperienced in credit matters. Credit services organizations have significant impact on the economy and well-being of this state and its people.

"B. The purposes of this act are to provide prospective buyers of services of credit services organizations with the information necessary to make an intelligent decision regarding the purchase of those services and to protect the public from unfair or deceptive advertising and business practices.

"C. This act shall be construed liberally to achieve these purposes."

Case Law
I identified only one case construing the act. In State ex rel. Woods v. Sgrillo, 176 Ariz. 148, 859 P.2d 771 (Ariz.App. Div. 2,1993), the court ruled that the Arizona Credit Repair Organizations Act is not limited to conduct that affects in state residents. Conduct by in state residents that affects out of state residents is also included.
State ex rel. Woods v. Sgrillo
176 Ariz. 148, 859 P.2d 771 (Ariz.App. Div. 2,1993)
STATE of Arizona ex rel. Grant WOODS, Attorney General, Plaintiff/Appellee/Cross-Appellant,
Ronald T. SGRILLO and Barbara Jean Sgrillo, also known as Bobbie Sgrillo, husband and wife, Jam Marketing, Inc., a corporation or purported corporation, individually and doing business as Baron Financial Group, Baron Financial Services, Baron Financial Systems, International Credit Card Services, Premier Credit Card Services, and Premier Group; and Valley National Bank of Arizona, Defendants/Appellants/Cross-Appellees.
No. 2 CA-CV 93-0176.
Aug. 26, 1993.
State filed action under Credit Services Organization Act (CSOA) and Consumer Fraud Act (CFA) against sellers of information purporting to put consumers in position to acquire low interest credit cards. The Superior Court, Maricopa County , Cause No. CV91-04440, Alfred J. Rogers, J., entered judgment in favor of state. Sellers appealed and state cross-appealed. The Court of Appeals, Livermore, P.J., held that: (1) CSOA applied to criminal conduct within state directed at nonresidents, and (2) fraudulent conduct of sellers was either sale of “merchandise” within meaning of CFA or deceptive acts in connection with sale of “merchandise.”
Affirmed in part and reversed in part.
West Headnotes

[1] KeyCite Notes

92B Consumer Credit
92BI In General
92Bk1 k. In General. Most Cited Cases

Credit Services Organization Act (CSOA) applied to criminal conduct within state directed at nonresidents, despite portion of Act's statement of purposes that referred to harm suffered by residents from practices proscribed by Act. A.R.S. §§ 44-1701 to 44-1712.

[2] KeyCite Notes

29T Antitrust and Trade Regulation
29TIII Statutory Unfair Trade Practices and Consumer Protection
29TIII(A) In General
29Tk139 Persons and Transactions Covered Under General Statutes
29Tk145 k. Goods or Services. Most Cited Cases
(Formerly 92Hk6 Consumer Protection)

Fraudulent conduct in selling information purporting to put consumers in position to acquire low interest credit cards was either sale of “merchandise” within meaning of Consumer Fraud Act (CFA) or deceptive acts in connection with sale of “merchandise” within meaning of CFA, in light of statutory definition of “merchandise” to include sale of services, and in light of fact that book or magazine containing information would fit within statutory definition of “merchandise.”A.R.S. §§ 44-1521, subd. 5, 44-1522.



(Cite as: 176 Ariz. 148, 859 P.2d 771, **771)





(Cite as: 176 Ariz. 148, *148, 859 P.2d 771, **771)



Grant Woods, Atty. Gen. by H. Leslie Hall and John W. Wall, Phoenix, for plaintiff, appellee, cross-appellant.
Jones, Skelton & Hochuli by Booker T. Evans, Jr., Phoenix , for defendants, appellants, cross-appellees.


LIVERMORE, Presiding Judge.

The state alleged that defendants Ronald and Barbara Sgrillo violated the Credit Services Organization Act (CSOA), A.R.S. §§ 44-1701-1712, and the Consumer Fraud Act (CFA), A.R.S. §§ 44-1521-1534, by their conduct through various entities in selling information about low interest credit cards. On cross-motions for summary judgment, the trial court found that all the conduct violated the CSOA and that a portion of it violated the CFA. The remainder, it ruled, did not violate the CFA. Judgment was entered accordingly with remedial injunctive relief, civil penalties of $2,038,000, and a substantial award of attorneys' fees and costs. The Sgrillos appeal the applications of the statutes. The state cross-appeals the adverse summary judgment on the CFA and the scope of the remedy granted. We affirm in part and reverse in part.

[1] While admitting that their conduct would violate the CSOA, defendants contend**772 that it does not because all victims were non-residents of Arizona victimized only by use of mail and telephone. This novel criminal immunity is derived from a portion of the statement of purposes of the CSOA contained in Laws 1988, Ch. 350, § 1, saying that “the people of this state” have been harmed by the practices now proscribed. Of course, our legislature was motivated in large part by the harm caused Arizona residents. How that can lead to the conclusion that the legislature intended to allow Arizona residents to engage in criminal conduct against non-residents escapes us. The best protection of our residents is in eliminating criminal conduct entirely not in limiting it to non-residents. Accordingly, we conclude that the CSOA applies to conduct within the state directed at those without it. See State ex rel. Corbin v. Pickrell, 136 Ariz. 589, 667 P.2d 1304 (1983) (RICO); State ex rel. Corbin v. Goodrich, 151 Ariz. 118, 726 P.2d 215 (App.1986) (CFA).

[2] Defendants' second argument on appeal, that what they sold is not “merchandise” within the meaning of the CFA, is equally unavailing. A.R.S. § 44-1521(5) reads: “ ‘Merchandise’ means any objects, wares, goods, commodities, intangibles, real estate, or services.” Given the breadth of this definition, the argument that the sale of information is not covered cannot be sustained. A book or magazine, containing information, would fit within the definition. So, too, would the packet of information sent by those for whom defendants acted. Defendants seek to avoid this conclusion by arguing that their acts were in aid of a sale by another entity. This is of no assistance because A.R.S. § 44-1522 forbids deceptive acts “in connection with the sale” of any merchandise regardless of whether the deceiver is the seller. If the acts of defendants in purporting to put consumers in a position to acquire low interest credit cards is not the sale of an object, ware, or good within the meaning of A.R.S. § 44-1521(5), it surely is the sale of a “service” and thus would still be covered. The broadly remedial purposes of the CFA should not be defeated by niggling distinctions unrelated to the protection of consumers by the elimination of fraud. Villegas v. Transamerica Financial Services, Inc., 147 Ariz. 100, 708 P.2d 781 (App.1985).

We deal summarily with the state's cross-appeal. We have examined the evidence to which the state has directed us, and the existence of which is not disputed by defendants, and find it sufficient to preclude summary judgment under the CFA. The state's claim for additional remedies can be pursued in connection with the trial of those claims. Because we have not been furnished a transcript of the hearing on remedies, we cannot find an abuse of discretion in the remedies ordered. We note that the civil penalties ordered will have the substantial deterrent effect which the state claims would be provided by the additional remedies it seeks.

Summary judgment in favor of defendants on the consumer fraud claims is reversed. In all other respects the judgment is affirmed. The state is awarded a portion of its attorneys' fees on appeal under A.R.S. § 44-1534 in an amount to be determined upon filing the statement required by Rule 21, Ariz.R.Civ.App. 1, 17B A.R.S.


For additional information about starting a credit repair company in [STATE] contact your state or an attorney.

Requirements for Surety Bond for Credit Repair Business in Arizona

A few states do require a surety bond. (At the time of this writing most states do not require a bond.) If your state does require a bond, you are not required to secure your bond from your same state.

Bonds are a minimal expense (usually under a few hundred dollars) because you order them from a bond service and pay only a small fraction of the bond yourself. A Credit Repair Services Organization Bond protects you. For more information about Credit Repair Services Organization Bonds, contact BondsExpress.

If you get your bond through a bonds service, the amount you pay will generally be 2-3% of the total bond amount (this cost varies depending upon your credit).

Statute of Limitation on Debt in Arizona

Arizona credit repair businesses must be knowledgeable about the statute of limitation governing debt in Arizona because this will guide your business decisions and enable you to best help your clients. The statue of limitations essentially limits the time that a creditor can legally sue a consumer for payments for a debt. Statutes of Limitation (SOL) do vary by state and debt type. In general, it is usually between 3 to 6 years, but sometimes longer.

Learn more about the statute of limitation laws for your state

Check SOL by State

Arizona Credit Repair License

We’re not aware of a state requirement for a “credit repair license” to operate a credit repair business in Arizona. However, many find getting training and a certification useful because it:

  • Conveys competence to prospective clients
  • Helps gain the trust of clients
  • Arms you with the training and tools you need to help clients and build a recurring revenue model

The American Credit Repair Academy http://try.creditrepaircloud.com/academy/; offers training, resources, and credit repair certification

Market Potential for an Arizona Credit Repair Business

Market Temperature:

0 1 2 3 4 5 6 7 8 9 10
Percentage Of Credit Reports That Have Errors


Total Number of People Living In Arizona

6.93 Million

Average Debt on Credit Report


Percent of Population With Credit Scores Below 700


Percent of home buyers getting a mortgage for their home purchase


How to Profit with a Credit Repair Business in Arizona

1. Start

  • Get a powerful CRM that handles your business for you
  • Train and learn about the business
  • Create a professional website
  • Market your business to new clients

2. Run

Use software to automate the tasks of a credit repair business in Arizona:

  • Import clients’ credit reports
  • Generate dispute letters in seconds
  • Manage recurring payments and affiliate programs

3. Grow

  • Capture new lead and close more deals
  • Use the data you gather to scale your business
  • Automate more functions: signature capture, payment integrations, meeting scheduling, and more

All of this is available with Credit Repair Cloud


Frequently asked questions

Do I need a surety bond to operate a credit repair company in Arizona?

In Arizona, credit repair companies are not allowed to charge for services until they have completed the entirety of the work for their client UNLESS they have a surety bond. (See § 44-1703, 1.) Having a surety bond from a company licensed to do business in Arizona allows you to charge a monthly fee for your services while you complete the work for your clients. A surety bond also protects your personal assets in the case a client claims to be damaged by violation of Arizona State Law, per § 44-1701 - 44-1714.

Do credit repair laws apply to me if I am already licensed as a loan officer or real estate agent in Arizona?
Credit repair laws apply to all persons who perform services for clients to “[improve] a buyer's credit record, history or rating” or “[obtain] an extension of credit for a buyer.” Many real estate agents and loan officers find credit repair to be a lucrative alternative income source. They still need to follow the laws that govern credit repair services in Arizona, even if they are already licensed or bonded for related financial service industries.
Does Arizona state law regarding credit repair companies apply to out of state clients?
Yes. The ruling from a 1993 case involving a credit repair company that sold low-interest credit cards targeting out of state clients determined that Arizona state law applies to credit repair companies operating in the state, even if their clients are out of state. Treat your clients well and be honest and you shouldn’t run into any trouble with the law.

What Other Credit Repair Businesses Say


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How to Quickly Start a Profitable Credit Repair Business


Secret 1

How Credit Repair is the LOWEST COST & MOST PROFITABLE business you can launch. . .

Secret 2

How our step-by-step “Dispute Process Blueprint” gives you EASY Credit Repair Results without being a credit expert. . .

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Legal disclaimer: Our software products and resources offer credit information, not legal advice. We make every effort to ensure the accuracy of the information and to clearly explain your options. However, we do not provide legal advice (i.e.; the application of the law to your individual circumstances). For legal advice, please consult an attorney, your city or your state.