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Everything You Wanted to Know About Launching Your Credit Repair Business - Corey Gray (Part 1)

By: Daniel Rosen May 26, 2020

Hey there, Credit Heroes! Welcome to a very special episode of the Credit Repair Business Secrets Podcast. This week, I'm coming to you from the Credit Repair Cloud headquarters, and I'm joined by none other than our very own resident credit repair expert.

So please help me give a warm welcome to Corey Gray!

Some of you may have already met Corey inside our Credit Repair Cloud Community, but I think that this two-part Q&A session will be an excellent way to introduce him to all of you.

For this week, we're going to dive into the first round of your questions and talk about everything you ever wanted to know about launching your own credit repair business. We had tons of fun doing this, and I'm sure there is something in it for everyone!


About Corey Gray


Corey Gray has over 20 years of experience in the credit repair industry. And like many of the success stories we've heard so far, he also started his business from nothing. He built it from the ground up, nurtured it, grew it, and in the end, sold it for a hefty price.

After that, Corey was looking for a new challenge. That's why I invited him to join our team as an in-house credit repair expert.

Corey's role inside the Credit Repair Cloud team is quite unique. All of his actions are 100% dedicated to helping you become the best credit repair specialist and business owner you can be. He's going to prepare some fantastic courses while also help people directly in our Facebook Community.

We've already worked on the Credit Hero Challenge together and created an incredible 14-day experience for everyone looking to start their own credit repair business. And I have to tell you - it's one of the best things we have ever done!

Learn more about the Credit Hero Challenge here!


Top 4 Questions From This Week's Episode


1 - When disputing, how do we know whether to dispute with credit bureaus, creditors, or collections?


Round one always goes to the bureaus. You can start out with a verification, or by you can dispute something specific if you suspect that it's factually incorrect. At the end of the day, it all depends on what the client has told you.

In many cases, clients won't have this kind of input, which is why you can dispute these items as questionable. By doing that, you're placing the burden of truth on the credit bureau.


2 - What are the best places to advertise a credit repair business locally to get the best response?


There is an incredible amount of different ways you can approach advertising your credit repair business. But you don't want to spend a lot of money on it, especially when you're just starting out. So what do you do? You get creative.

You can experiment with all kinds of guerilla marketing strategies to reach people, both online and offline. Still, it all comes down to one thing - meeting people and building relationships. Do whatever allows you to reach and talk to as many people as you can.

“The best advertising, if you're just starting your business, is word of mouth.” - Daniel Rosen

Keep in mind that word of mouth is one of the best ways to spread the news about your company. As soon as you've mastered the basics of credit repair, get out there and help people. Start with your friends and family, and if you do a good job, they'll do your marketing for you. Remember - happy customers are your most potent advertising weapon.


3 - What types of business insurances are recommended for a credit repair company?


An excellent question, but before we get to the answer - a little disclaimer. 

Corey and I are not attorneys. If you're looking for legal advice, your best course of action is to meet with a professional. 

These are some of Corey's impressions he's gathered over the years.

There are two types of insurance that seem like they can be particularly useful for credit repair businesses. Primarily, Errors and Omissions Insurance (E&O) can help cover the expenses caused by mistakes that arise from working with a client. 

Another one worth learning more about is the Directors and Officers Liability Insurance (D&O), which is basically marketing insurance. If you've mentioned something as part of your advertising campaign that can get you in trouble with the FTC or another agency, this type of insurance could get you out of a jam.


4 - What's the difference between a charge-off and a collection? And why do they sometimes appear at the same time?


A charge-off occurs in situations where a company no longer feels that a debt is collectible, usually after about 90-120 days. Debt is legally considered a company asset, which is why it's also taxable. By charging it off, they're denouncing it as an asset, meaning they're no longer trying to collect and therefore do not need to pay taxes on it.

Now, since the lending company doesn't have a method for collecting debt, they usually either lease or sell that debt to a third party - a debt collection agency. The collection agency then starts sending collection notices, make dunning phone calls, send emails, and do anything they can to collect that debt.

These changes in your debt status and history are a part of your credit report, which is why sometimes you see these items appear together.

That’s it for this episode. Tune into next week's episode for part two of our Q&A session.

Until then - keep changing lives!


Be sure to subscribe on your favorite platform below!

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Topics: Podcast


Daniel Rosen  0:00  

Hey, Credit Heroes! I wanted to do something really special today. Everyone who is starting a credit repair business, they always have a million questions. So I sat down with Corey Gray, who is our resident expert and authority on credit repair here at Credit Repair Cloud, and we answered every single question that every new credit repair business owner wanted to know. We talked about disputes, running your business, dealing with bankruptcies, getting clients, getting paid... If you are in the credit repair business, or just getting started and you have burning, burning questions will then listen up because we are going to answer them right now. 


So the big question is this. How can we take our passion for helping people with their credit and turn it into a successful business without taking loans without spending a fortune by bootstrapping it from nothing, so we can help the most people and still become highly profitable? That is the question and this podcast will give you the answer. My name is Daniel Rosen, and welcome to Credit Repair Business Secrets. 


Hey, what's up Credit Heroes?


Corey Gray  1:14  

What's up Credit Heroes?


Daniel Rosen  1:15  

Calling all Credit Heroes! Hey Credit Heroes! Daniel here, I'm at Credit Repair Cloud headquarters. I know lots of you guys are joining. I'm going to give you guys a few minutes. This is a really, really exciting day here. We are here with Corey Gray, over here. Corey, you might know he's been in the community for a few months but it's time we really really introduced him to you because he's kind of a big deal. He's been in the credit repair business for over 20 years and, just like you and me, started a business from absolutely nothing. And then he grew it very, very, very large. And then he sold it. And then he wondered what to do next. And I said, come over here to Credit Repair Cloud, so you can be our in-house credit expert, and help everyone. So now he's helping people every day on Facebook and building these amazing courses on disputing. And those are going to be launching very soon we're going to announce them very soon. And finally, here's what I'm really excited about. Finally, we have someone at Credit Repair Cloud, whose goal every day is to just wake up every morning and just help you. He can answer your questions. He's going to help you to be better and better at the dispute process. And we're really, really thrilled. So, Cory, welcome.


Corey Gray  2:45  

Thank you, Daniel. I appreciate the warm introduction. I'm thrilled to be here. Love the company, love all of you guys. I want to help you any way I possibly can. And I think this Q&A session is a great way to start. 


Daniel Rosen  2:59  

Yeah, it's gonna be fun. But I want to know, before we get into all of this 20 years ago, very few people were doing credit repair. I mean, you really were a pioneer. What got you into this? What got you into credit repair?


Corey Gray  3:14  

So, my story really didn't start like a lot of the others, a lot of people had, you know, traumatic injuries to their credit, mine didn't start that way. I actually work for a debt consolidation company, you know, Consumer Credit Counseling company back in the late 90s 98, actually 9798 99 and while I was there, you know, we were helping people consolidate their debt and basically get them out of debt in a shorter period of time than if they were doing it on their own. And although we were helping people, the one place we really weren't helping them at all was with their credit. So when we were finished with them, they had traumatic credit problems. So I just saw a huge demand for it and I started up shop. I started a Very low key very small business. And, you know, I built it and built it and built it and eventually, it became a, you know, a juggernaut. So that's basically how I get started, if that answers your question, Daniel.


Daniel Rosen  4:15  

But you really did do it from nothing, right?


Corey Gray  4:19  

I did, there really weren't any resources in Credit Repair Cloud wasn't around. I do vaguely remember seeing credit aid popping up with Daniel, you know, but no, there were a few different software's out there. But you really had to learn the ropes all on your own. It wasn't, you know, just like a blueprint where you can follow these steps. So there was a lot of trials and tribulations between the steps and, you know, a lot of mistakes that were made. I did a whole bunch of failing, but... 


Daniel Rosen  4:49  

There was no Credit Repair Cloud Community you could log in and just ask your question and have all the experts answer it. Right?


Corey Gray  4:57  

No, there really wasn't anybody out there. You know? No, it was a long, hard road. But I think that the harder it is for you to accomplish something, the better it'll be for you. Because without those slip ups and those fails and those falls, you really just don't learn anything. So yeah, I'm grateful that it was as difficult as it was. 


Daniel Rosen  5:19  

Yeah. I mean, it's not easy starting a business from nothing with zero budget. But you've done it and you grew something very large. I've done it. And now we can help others to do the same thing. And that's what is really, really cool. That's gospel. Absolutely. We have a whole bunch of questions. We posted it. We're gonna be doing this QA session live, and a bunch of people wrote amazing questions. So the way this is going to work is I'm going to go through and I'm going to, I'm going to read off the questions and then depending if it's about actually we're just going to alternate if it's more about the credit, disputing you'll be Corey but we'll just sort of jump at this and see how it goes. So sounds good. Very I mean, they're really great questions and thank you guys for writing them in. And by the way, Kanan is here, here say hi Keenan. 


Corey Gray  6:10  

Hey, what's up, Keenan? 


Daniel Rosen  6:12  

Keenan's over there with my cloudy pillows. Anyways, Keenan is also going to let us know if you guys are listening, and you have questions that you want to ask, you can just type them in, and Keenan will hopefully see them and relay them to us. But I'm going to start with these questions that we already have on the page. Okay. Are you ready, Cory? 


Corey Gray  6:33  

I'm ready. Let's do this.


Daniel Rosen  6:34  

Okay, so the very first question comes from Alex, Alex Marquez, and he asks When disputing, how do we know whether to dispute with credit bureaus, creditors, or collections? Is it based on questions that you ask the client or if is it not possible to dispute just with the credit bureaus? 


Corey Gray  6:56  

That's a great question, Alex. So really, you always Want to revert back to this key thing here, you want to make sure that you're always starting out with round one with the Bureaus. Okay, that's really that. The first thing you want to do is go directly to the Bureaus. Now, you could start out with a verification, meaning you're asking them to verify it, or you can dispute something specific that you feel is factually incorrect. But the reasons and the instructions really are based on what the client tells you. So if the client tells you that this information, this account is wrong, because it's the wrong status date, or it's the wrong balance or whatever, is factually wrong with that, you can dispute that, on that, on that fact, on that factual basis. However, most coins don't give you that feedback. A lot of clients are coming at you and they're asking you to remove something. And if you don't have an actual reason to dispute it, then you can always rely on just basically saying that it's questionable, meaning that you are asking the Bureau to go ahead and investigate it and verify it, you're putting the burden of proof on the credit bureau. So to answer your question, you really don't need to worry about who you're sending it to just always start with round one. And if you have a factual reason to dispute it, go ahead and use that reason. If you don't, then go ahead and just dispute it as questionable.


Daniel Rosen  8:32  

And round one always goes to the Bureau's


Corey Gray  8:34  

That's correct. Always, every time.


Daniel Rosen  8:38  

Yes. So then you just see how they what comes back from them. Well, that was a really good question. And good job, Cory. Thank you. Thank you. Let's go on to the next one. This is from Margaret Kindle. And she says, I'm kind of lost questions about everything a big frowny face. Started on a practice account. Possible affiliate, but it's 166 pages long. And it's my first one. Questions about that, as far as disputes go. Also having software issues, trying to get email set up, also moving along slowly getting legally set up questions about that, too. I'm not sure where to start. So why don't we start with that? Hundred 66 page report, man. 


Corey Gray  9:28  

So Margaret, first of all, I've seen thousands of credit reports. I've never seen one 166 pages long. That's pretty crazy. Look, yeah, I mean, 166 pages, okay. So he must have a lot of negative information, or she. Okay, either way, regardless of how long the credit report is, or what you see on the credit report, just like we just talked to Alex, you want to start with round one. And you want to make sure that you're disputing five items are so roughly five items. We will talk about this a little bit later. I saw another question about that. But for now, you know, just start out with the first five items and go after it. As far as the software issues that you're having, that's going to be a support at Credit Repair Cloud issue, but it may be Daniel can...


Daniel Rosen  10:21  

Let me jump in there. I don't know what software issue you're having. But we want to help you. I don't know if it was a soft use mentioned software and email issues. So you can write to our support team, whether it's about Credit Repair Cloud, or if it's about your web hosting, and your email, if you're with my credit repair site. Just write to support at creditrepaircloud.com, tell them what issue you're having what's going wrong, and they'll help you. They'll help you they usually respond within an hour. We've hired so many support people so just reach out to them, okay, and they will assist you with whatever issue you're having. We'll get you rolling smoothly.


Corey Gray  11:02  

That's right. I mean, all of our agents, they wake up every morning wondering how can we make our Credit Repair Cloud users’ lives easier. So whenever you have a problem, just make sure you reach out to them. So you had a second part of this question. So you were talking about how do you get set up legally, and you weren't really clear on what that meant? But I guess my question to you would be what have you done so far, because, you know, there's a lot of different parts on getting set up. And what I mean by that is, you know, when you get started, you want to make sure you have your entity set up, meaning whether you have an LLC or a corporation or sole proprietor, and, you know, I'm not an attorney. I'm not really here to give you any advice as far as you know, legal or tax ramifications, but you want to make sure you get that set up first, and then...


Daniel Rosen  11:51  

Can I jump in? 


Corey Gray  11:52  



Daniel Rosen  11:52  

People ask us all the time, what kind of Corporation should I be or should I be an LLC and why? This is really useful. Between you and your tax preparer or your accountant, your CPA, whoever you go to, for your taxes, you'll want to ask them, because they're the expert, okay, they're going to know what's going to save you the most money and what's gonna be more beneficial and, and what's going to save your butt 


Corey Gray  12:16  

100%. So, once you've got that done, you want to just register with the IRS, get your EIN number. And then once you have that, you know, you can go ahead and open a business bank account, you can obviously start to make sure that you're doing everything properly. And one of those things is to make sure you check out your state requirements. We do have a really great page if you just do a quick Google search, Credit Repair Cloud state laws. There's a lot of information on what you need to do to make sure that you're compliant and every state is different. We don't you know, we really can't keep up with making sure that every little part of you know what you're doing to set up your business is correct. You know, you can always add An attorney. But there are a couple of things that you want to make sure of. And one of them is make sure that you're, you're registered as a credit service organization in your state. And each state is different. I did submit a sheet to the Facebook community the other day, I think it was CSO compliance. If you check that out, there's a line by line state by state exactly what you need to do. And if you just go to that sheet, and if you land on something, and you just don't know exactly what to do, just hit me up on Facebook, and I'll make sure that I help you out. So... 


Daniel Rosen  13:34  

And you uploaded that here in the community, right? 


Corey Gray  13:36  

I did. Yeah. 


Daniel Rosen  13:37  

So I don't A lot of people don't realize this. But there is some amazing, amazing stuff. Here in our community. It might be harder to see if you're logging in on a phone. But if you're on a computer, you click the button that says files, and you'll see like miles and miles of amazing scripts and documents and laws. And all kinds of really, really useful stuff. So if you have not been to the file section, I recommend that you click on files after you're done watching us, because you'll just find a bonanza of crazy cool stuff in there. Yeah. And then can you post a link down below about the link to the state laws? because that'd be really helpful for people too


Corey Gray  14:22  

Okay. Yeah, that's a great resource. Daniel. Also, if you just go to the search box, and then search, whatever you're looking for, like if you type in CSO requirements, and the search box is going to pop right up. So absolutely. I hope that answers your question, Margaret.


Daniel Rosen  14:37  

Yeah, I hope that did too. Let's go on to the next question. It is from Ron, friend. I like that name. Okay, Ron. Ron asks, What are the best places to advertise a credit repair business locally to get the best response? Is there a particular area to focus on and I'd say this ball's in your court, Corey.


Corey Gray  15:02  

Yeah, I mean, this is just straight marketing. And I mean, I guess you just really need to be creative and explore all the different places that you can market to. So we did just about everything. I mean, starting out, there was no stone I left unturned. There were so many different places that I went out and just did every type of guerilla marketing you can think of. And when I say guerrilla, I mean, really low budget, like anything I can do to just drum up business. One of the things that I did, which I don't know if I would really recommend it, but I bought those political yard signs, you know, the ones that they place in the yard, you stick them in the ground, well, instead of sticking them in the ground, I had a I had an h1 it was a military Hummer addition vehicle. And what I did was I put an A-frame ladder on top of it, and I climb up the ladder, and I would nail him in with fat head nails as high as I could into the toilet. Phone poles, we would go on road trips and just nail them up. And the problem was was the good thing was was nobody could get them down. But the problem was, was code enforcement. So you can't really get in trouble unless they see you doing it. But one day, I did get caught doing it. And the guy literally wanted to kill me. He said that he almost died trying to pull these things out of the telephone poles. But there's a million different ways you can go about it. I mean, we did barbecues, we bought this big smoker and we would set it up on the side of the road in Palm Beach County. And we would just have a big sign that said, free hotdogs are free hamburgers, and we would cook hot dogs and hamburgers, and we would hand them out to people and just strike up conversations and talk about credit repair and we got a lot of business that way. We did a lot of meetups you know there's meetup.com you can start your own meetup or you can join other meetups. You talk to like-minded people, you got a network you got to talk to people is a lot different. things you can do. I mean, you could do direct marketing where you're mailing out mailers to specific neighborhoods in your area. It really just depends on what you want to do these days, there's, you know, it when I see these days, this is like, you know, four or five years out from where I was in technology really has changed and, and improve. And these days, I mean, you can geo-target on Facebook to your specific area. And I'm saying this because you said local, and, Ron, if you're trying to hit the local area, you gotta, you got to mingle with the locals, you got to talk to them, you got to deal with them, you got to figure out what they want and create relationships with them. But I mean, I really think that what you really want to do is just make sure you reach as many people as you can and build relationships. So I'm not sure if that answers your question totally, but that's what I did.


Daniel Rosen  17:54  

But I want to jump in on that. Besides throwing barbecues and all that all that's amazing. And you should hit the streets. And like in Pulp Fiction where the guy says he just wants to go walk the earth, you should just walk in, and, and meet every mortgage broker realtor person who installs solar, and just shake their hand and tell them, you know, if they work with you, they're going to sell more houses, they're going to sell more solar. It's a win-win for everyone. And that doesn't cost anything. But the best advertising, if you're just starting your business is word of mouth. Start by helping out be a credit hero and start by helping friends and family and really over-deliver and then get testimonials from them. And then you can have them be your first affiliates. And it really is just generating that word of mouth by being awesome. And that yeah, that's gonna really catch fire and that's, you could do that for free. Yep, I agree for free during a Credit Repair Cloud free trial even.


Corey Gray  18:59  

That's right.


Daniel Rosen  19:00  

Yeah, so there you go, Ron. Okay, let's go on... Oh, Ron has another question here. 


Corey Gray  19:05  

It's probably four or five questions. 


Daniel Rosen  19:07  

Oh, wow. Okay, cool. Ron asks, Is it possible for Oh, this is one for me. Is it possible for the client to pay for services from inside the client portal? Once everything we've been set up? And Ron? No, no, that's not possible and up, but I'll tell you why. You wouldn't want someone to have portal access unless they are already a client. Okay? So everything in CRC has a flow. So here's what I recommend. You can have them sign up and pay on your website if you use our web lead form. And if you're using charge, but you can put charge fee plans in there, but to be honest with you, if you're leaving it up to the client to sign themselves up, you're going to get a lot fewer signups. Okay, the better thing to do is to hold their hand through the whole thing. So what you can do, instead of worrying about the portal just yet, just load The potential client into the software, okay, then you import their report and do simple audit, which you can do when a client is just a lead. Okay. And then when you have the simple audit report, it is so cool. I don't know if you've run simple audit, but it's like when you take your car to the dealership, and then you get that long readout of all the ways that dealership can help you with your car, and it gives value and you learn about your car. And it's the same thing with the simple audit. Yeah, the client really learns about their credit, they learn how you can help them they learn things they can do to speed up the process and do things on their own. But it really gives value it gives massive value, and it explains what it is that you do as a credit repair expert and it's designed to really lead that sale, okay to close that sale. So if you just go through the simple audit report with that client that's going to close the sale, and then at that point, all You need to do is complete their client profile and ask them for their credit card details and type them in. Okay, if you're asking for them and you're typing in, you know what's going to happen rather than leaving it up to them, okay, so hold their hand, do the simple audit, wow them, then ask them for credit card details entered into Credit Repair Cloud, choose which agreement you want, and have those set up first. And if you're using charge, but you choose which charge pay plan, and then you've clicked to submit and add them as a client, and boom, Everything's all set up for the charging to their card, they get sent a login, they log in, they sign your agreement, and they can do this all on their mobile phone. And then they're guided through the onboarding where they take pictures of their photo ID and proof of address and choose a signature font that gets inserted in the letters and all that so that's the flow. Okay, I hope that makes sense. And then and then they’re off and running. Okay, let's go. Wow, he does have a lot of questions. 


Corey Gray  22:03  

That makes perfect sense, thanks, Daniel. 


Daniel Rosen  22:05  

Yeah, sure. So do you know of any online attorneys that prepare per state client service agreements for credit repair? So we both know the same guy?


Corey Gray  22:18  

Same guy, so he may not be an online attorney, but I would recommend that you contact Robbie Berman. He helped me out of a couple of tide jams. He's really the biggest credit repair attorney out there. So if you want his phone number, his direct line is 954-343-6959. You can also email him it's robbiebirnbaum@gmlaw.com. He's just a great resource. I mean, most credit repair companies keep him on retainer, just to make sure that anytime they have a question they can help them out. But you know if you need some help with an agreement Just feel free to reach out to him and at the very least he'll give you his direct opinion on what you need. He's very, very much a straight shooter.


Daniel Rosen  23:08  

Really nice guy. He came and spoke at Credit Repair Expo. He was on stage for what an hour Keenan? I think it was an hour and he just like he's just a walking encyclopedia of the law and just brilliant. I'm we're going to be doing some interviews with him on my upcoming podcasts. I love Robby Birnbaum In fact, if you can't remember the number or his email address, if you just search Robbie aro BB why burn bomb bi are and ba UM, you'll see him listed everywhere. 


Corey Gray  23:41  

I'll post it on Facebook after this is over. Cool. So yeah. 


Daniel Rosen  23:46  

I'd say he probably handles more credit repair businesses than any other attorney in the country.


Corey Gray  23:52  

Yeah, he's the go-to guy. He's definitely the go-to guy.


Daniel Rosen  23:55  

He's also affiliated with Nexo. I believe


Corey Gray  23:59  

He's the president Nexo.


Daniel Rosen  24:01  

There you go. And that's an organization that also advocates for credit repair companies, with the government. They do lobbying and stuff. That's right. Yeah. So he's fighting for your rights. Okay, next question. What types of business insurances are recommended for a credit repair company? Great question.


Corey Gray  24:20  

That's an awesome question. So I never subscribed or paid for these types of insurances. And I actually learned this from Robbie, you should have no insurance, which is errors and omissions. So this is basically to make sure if you ever make a mistake if you cause a problem for a client that you know is going to cover that and then there's also DNO which is directors and officers insurance. It's basically marketing insurance. So if you send out flyers and you say, Hey, we guarantee a 50 point increase in your credit score, the FTC or the state ag or the CFPB or Some other agencies somewhere, it'll probably catch their attention and they're probably going to come after you and if they do, this covers your a SS. So, you know if you're talking acronyms as nl for air emissions and DNO for directors and officers insurance, so, you know, for me, I mean, I tend to be more by a fly, you know, fly by your seat, I'm a little bit more risky. Like I didn't even get bonded in any other states other than Florida. For the first like five years, I was in business, even though I was doing business and all 50 but eventually, it caught up to me, and I probably should have been a little bit more careful with what I did as far as making sure I was doing everything by the letter of the law. But for insurance, if you really want to be careful, you want to really want to make sure that you're doing the right thing and you're protected. Get the no and DNO insurance.


Daniel Rosen  25:57  

Yes. And by the way, disclaimer here. This, Corey and I, we are not attorneys. Do not take this as legal advice. If you're starting a business, you should invest in meeting with an attorney, because that's what they do. Okay, but we're going to help you start a credit repair business and be very, very successful at it but cover your a-s-s.


Corey Gray  26:22  

Good call.


Daniel Rosen  26:23  

Yeah. Okay, another question. And this is still from Ron. Okay. These are great questions, Ron. Okay. His question is, can the original creditor and the collection agency that purchase the debt report the same account to the Bureau's, or would this be considered double reporting or double enrichment?


Corey Gray  26:44  

This is such a common question and it causes so much confusion. So you would think that, okay, you have a credit card with Capital One and then Capital One, you know, for one reason or another, you stop paying, they charge it off, it goes to collections and Then the collection agency comes along and reports that as a collection doesn't really sound fair, you have Capital One reporting it, then you've got ABC collection company reporting it. Well. The truth is, is it actually is legitimate, it actually is correct, because the original creditor and the collection agency are both reporting accurate information. I mean, this is your credit history. Now. The original creditor can't keep reporting a balance after the collection agency reports a balance but they can report that it was charged off and sold to a third party. So now you have Capital One, reporting that it was charged off, and it was sold to a collection agency with a zero balance. And then you have ABC collection agency reporting, you know, a 1200 dollar balance for a capital one account. That is actually truly your credit history. that's accurate. So to answer your question, yes, they can continue reporting that but to go a little bit deeper on that, that doesn't mean that you have to live with it. You can use the letters in our library to dispute it with the original creditor and a collection agency, and hopefully, get it removed. Cool. So hopefully that answers your question.


Daniel Rosen  28:18  

Sounds good. Okay. Now we have a question from Star Bose. And Star asks, what would be considered proof of the debt is a simple bill enough?


Corey Gray  28:30  

That's a good question star. So under the FDCPA, if you're disputing the debt, meaning if you're demanding validation on a debt, the bar is pretty low. Okay, the third-party debt collection agency is required to only produce the amount of debt, what the debt was for, and the address of the original creditor so there's not very much that they need to prove it. Now. If you Look at this from a different perspective. If you look at it as, hey, I'm being sued for a debt, that's not mine. And you demand out validation from a third-party debt collector, and they only say, yeah, you owe $50,000. And it was with Capital One, and it was for a credit card. That really doesn't prove it, because validation is there to prove that the debt is indeed valid. That's the term validation. So if you go to court, and you show the judge, hey, look, I asked for validation of this account. And Capital One said, Yeah, you owe $50,000. Here's their address, and it was for a credit card, that doesn't necessarily mean that I am liable for that debt. So in short, the FDCPA does set a very low bar to prove the debt is valid, but at the same time it if it ever gets into a courtroom, usually the judge is going to have enough common sense to know that, hey, if this debt is not truly this client's debt, or this consumers debt, then it may not be effectuated into a judgment. So I don't know if I'm going too deep on that subject, but to answer your question to prove it that the bar is very low.


Daniel Rosen  30:20  

Cool. Hey, we have a comment here. I can't see who it's from, but it relates to the last question. What happens if you are not bonded? And you get caught?


Corey Gray  30:31  

I can tell you from personal experience, it's not a fun experience. Robbie robi makes it Ravi Birnbaum my attorney made it seem as if it was really not a big deal. And he made it not a big deal. And he fixed it with no problem. But it's really stressful. I mean, if you have a federal regulator, whether it's a state ag or the FTC or the CFPB coming down on you, I mean, the fines that they can impose are huge. So you know what happens? What happened to me was they asked it was in the state of Indiana. And they wanted to know, every single client that I've ever done business with in the state of Indiana. They wanted a contract to make sure that it's CRO a compliant. And they wanted to see the billing history. And they wanted to see all the letters that I had sent to every client in the state of Indiana. So they're very specific. They just want to know about what's going on with the customers that you dealt with in the state of Indiana. So usually, frankly, it's a shakedown. That's what the state agencies want. They want money, they want to, you know, they want to fund their coffers, and they want to collect as much money as they possibly can. Just to elaborate on that a little bit. What I did for years and years and years before I really got serious, was I was only bonded in the state that I was in. Now. The thing that you want to think of is when a state ag or the FTC anybody comes down on you, they're going to be looking at the consumers in their state. That's really all they care about, well, the FTC, the state AG, and the CFPB, or excuse me, the FTC and the state and the CFPB are federal, but the state ag is they care about the consumers in their state. So what you can do to just really make sure that that doesn't happen to you. And if it does, you're protected is, number one, you should really have a bond in the states that you're doing business in. I personally, I ended up fighting it based on interstate commerce laws, because like, let's say you're in Florida, and you only have 200 clients in Indiana. It's not really fair that you have to pay for a bond and a license and CSO registration in Indiana if 90% of your clients are in Florida, but the state agencies don't really look at it that way. So what you should do is, number one, make sure your contract is just really solid. It's not you know, it's trading parent, you're not deceiving anybody you're not saying anything that's, that's deceptive. That's gonna mislead any consumers. And number two, make sure you're doing the work that you say you're going to do. Make sure you're following Kra don't actually charge for the work until you do it because that's what they require. And, and other than that, I mean, if you just treat your clients good and 99.999% of the time, you're not going to get any complaints. You know, as long as you're doing the right work, you're doing what's right for them, and you're setting the right expectations. You're not telling them, hey, I can get you 100 point increase, or, hey, you know, I'm gonna get you into a house in the next six months. Just be real and honest with people. If you set the right expectations, you're really not gonna have a problem. And honestly, I don't even remember what the question was. He just asked me I was going in all different directions. But, but...


Daniel Rosen  33:54  

I want to jump in. Again, don't take any of this as legal advice. The law actually says you If you have clients in different states, you're supposed to have a bond if it's required in those states, some states don't require a bond at all. Some people freak out and see the giant cost of a bond and don't realize you're only paying for a small portion of that. And then also, if you're just starting your business, there's a lot of people in your state. So you don't even need to worry about other states. That's just noise. Don't worry about that until you're ready to grow to other states. Just concentrate locally. And then when you have so many clients from your own state and you're ready to go to other states, then look at what you need to do for those states. That's all I wanted. 


Corey Gray  34:41  

Well said, absolutely.


Daniel Rosen  34:43  

Yeah, but none of this. I mean it building a business. Just worry about what's in front of you today. You know, so many people worry about a million different things and you just want to keep it simple and keep moving forward and every day, grow it. Your question, I want to I can't see in this software who's asking the question, but it's a really, really good question. The question is, what's the difference between a charge off and a collection? And why do they sometimes appear at the same time,


Corey Gray  35:14  

A charge off and a collection. So a charge off is when a company essentially no longer feels that the debt is collectible, it's typically around 120-180 days, they're going to basically consider it a charge off, so they no longer have to consider the debt as an asset. So companies consider every debt that they own an asset for their company, therefore they pay taxes on those debts. So when they charge it off, they're eliminating their tax liability. And by doing that they no longer have to pay taxes on that debt as an asset for the company. So the difference between a collection is in a charge off is with a collection, they're still attempting to collect the debt with a charge off They're no longer claiming that debt is an asset for the company. So what was the second part of the question? What's the difference between a charge off and a collection? And why do they sometimes appear at the same time? So okay, let me give you a hypothetical. Let's say that you and... I'm just going to use the same company just for, you know, whatever reason. So let's say that you owe $100 debt to Capital One. Capital One gives you a credit card, you stop paying it, right. And then after about 90 to 120 days, they're going to basically give up hope that you're going to pay it. So they're going to charge the debt off. And again, that's charging the debt off, so they no longer consider that debt, an asset for their company, and they no longer have to pay taxes on it. When they do that, you know, at that point, they really don't have a method to collect that debt. So what they're going to do is they're either going to sell or lease that debt off to a third party debt collection agency. It might be... They might leave It or they might sell it, either way, the third party is going to come in, and they're going to attempt to collect that debt. So you're going to start getting collection notices, dunning phone calls, you might get emails, who knows... They're going to do whatever they can to try to collect that debt, and now at that point, it's a collection. And again, that same question, I think it was Ron asked that question earlier, you have the original creditor, Capital One, is showing you $100... the charge-off account, and then all of a sudden you have ABC collection company reporting it as $120 collection account. Well, that's because that's the history of the account. And that's really what credit reporting is all about. It's about your history as a consumer and the debts that you owe. So Capital One is going to... Is going to sell it off to the collection agency. You're going to see Capital One, and then you're going to see the collection agency,


Daniel Rosen  37:52  

Well said. 


Okay, I hope you enjoyed this QA session with Cory. We're going to stop right now. And we're going to pick this up again on the next episode, where we are going to answer the rest of the burning, burning questions. In the meantime, I hope you're finding value in this podcast. My whole goal here is to help you to be more successful with your credit repair business. So if that sounds good to you, then please click below to subscribe because I don't want you to miss any episodes. And I would love to know how I'm doing. So if you have any feedback, please leave it below in the comments. I would love to know what you think. And I will see you on the next episode. And until then, keep changing lives. 


Want a fast-track to creating an amazing business that helps people, changes lives, and makes you a great living in the process? Then I'd like to invite you to my free online training at creditrepaircloud.com/freetraining. In this free training, you will learn how to get clients willing to pay you even if you're just starting out, how to get easy credit repair results without being an expert, and how to get all the clients you'll ever need without paying for advertising. Again, this training is absolutely free. Just visit creditrepaircloud.com/freetraining.

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