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How to Start a Credit Repair Business

in

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Cost of starting a credit repair business

Roughly $200

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Cost to obtain the required $10,000 bond:

Roughly $200

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Potential average profit

$20,000 monthly

Credit Repair Laws in Florida

There are federal and state laws for Florida. 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

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

Florida State Laws

FL ST § 817.69
Part III. Credit Service Organizations Title XLVI. 

Crimes (Chapters 775-899)

Chapter 817. Fraudulent Practices
Part III. Credit Service Organizations

817.69. Repealed by Laws 1973, c. 73-124, § 3

817.70. Repealed by Laws 1973, c. 73-124, § 3

817.7001. Definitions

As used in this part:

(1) "Buyer" means any individual who is solicited to purchase, or who purchases, the services of a credit service organization.

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

1. Improving a buyer's credit record, history, or rating;

2. Obtaining an extension of credit for a buyer; or

3. Providing advice or assistance to a buyer with regard to the services described in either subparagraph 1. or subparagraph 2.

(b) "Credit service organization" does not include:

1. Any person authorized to make loans or extensions of credit under the laws of this state or the United States who is subject to regulation and supervision by this state or the United States or a lender approved by the United States Secretary of Housing and Urban Development for participation in any mortgage insurance program under the National Housing Act;

2. Any bank, savings bank, or savings and loan association whose deposits or accounts are eligible for insurance by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, or a subsidiary of such bank, savings bank, or savings and loan association;

3. Any credit union, federal credit union, or out-of-state credit union doing business in this state;

4. Any nonprofit organization exempt from taxation under s. 501(c)(3) of the Internal Revenue Code; [FN1]

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

6. Any person collecting consumer claims pursuant to s. 559.72;

7. Any person licensed to practice law in this state if the person renders services within the course and scope of his or her practice as an attorney and does not engage in the credit service business on a regular and continuing basis;

8. Any 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 that regulation; or

9. Any consumer reporting agency as defined in the Federal Fair Credit Reporting Act, 15 U.S.C. ss. 1681-1681t.

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

[FN1] 26 U.S.C.A. § 501(c)(3).

 

817.7005. Prohibited acts

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

(1) Charge or receive any money or other valuable consideration prior to full and complete performance of the services the credit service organization has agreed to perform for the buyer, unless the credit service organization has obtained a surety bond of $10,000 issued by a surety company admitted to do business in this state and has established a trust account at a federally insured bank or savings and loan association located in this state; however, where a credit service organization has obtained a surety bond and established a trust account as provided herein, the credit service organization may charge or receive money or other valuable consideration prior to full and complete performance of the services it has agreed to perform for the buyer but shall deposit all money or other valuable consideration received in its trust account until the full and complete performance of the services it has agreed to perform for the buyer;

(2) Charge or receive any money or other valuable consideration solely for referral of the buyer to a retail seller or to any other credit grantor, who will or may extend credit to the buyer if the credit that is or will be extended to the buyer is upon substantially the same terms as those available to the general public;

(3) Make, or counsel or advise any buyer to make, any statement that is false or misleading or that should be known by the exercise of reasonable care to be false or misleading, or omit any material fact to a consumer 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 credit worthiness, credit standing, or credit capacity; or

(4) Make or use any false or misleading representations or omit any material fact in the offer or sale of the services of a credit service organization or engage, directly or indirectly, in any act, practice, or course of business that operates or would operate as fraud or deception upon any person in connection with the offer or sale of the services of a credit service organization, notwithstanding the absence of reliance by the buyer.

817.701. Surety bonds; exemption

The requirement to obtain a surety bond and establish a trust account as provided in s. 817.7005(1) shall be waived for any salesperson, agent, or representative of a credit service organization where the credit service organization obtains such surety bond and establishes such trust account.

817.702. Statement to buyer

Upon execution of the contract as provided in s. 817.704 or agreement between the buyer and a credit service organization and before the receipt by the credit service organization of any money or other valuable consideration, whichever occurs first, the credit service organization shall provide the buyer with a statement, in writing, containing all the information required by s. 817.703. The credit service organization shall maintain on file for a period of 5 years an exact copy of the statement, personally signed by the buyer, acknowledging receipt of a copy of the statement.

817.703. Information statement

The information statement required under s. 817.702 shall include all of the following:

(1)(a) A complete and accurate statement of the buyer's right to review any file on the buyer maintained by any consumer reporting agency, as provided under the Federal Fair Credit Reporting Act, 15 U.S.C. ss. 1681-1681t;

(b) A statement that the buyer may review his or her consumer reporting agency file at no charge if a request is made to the consumer reporting agency within 30 days after receiving notice that credit has been denied; and

(c) The approximate price the buyer will be charged by the consumer reporting agency to review his or her consumer reporting agency file.

(2) A complete and accurate statement of the buyer's right to dispute directly with a consumer reporting agency the completeness or accuracy of any item contained in any file on the buyer maintained by the consumer reporting agency.

(3) A statement that accurate information cannot be permanently removed from the file of a consumer reporting agency.

(4) A complete and detailed description of the service to be performed by the credit service organization for the buyer and the total amount the buyer will have to pay, or become obligated to pay, for the services.

(5) A statement notifying the buyer of his or her right to proceed against the bond or trust account required under s. 817.7005.

(6) The name and address of the surety company which issued the bond, or the name and address of the depository and the trustee and the account number of the trust account.

817.704. Provisions of contract

(1) Each contract between the buyer and a credit service organization for the purchase of the services of the credit service organization shall be in writing, dated, signed by the buyer, and shall include all of the following:

(a) A conspicuous statement in boldfaced 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 prior to midnight of the fifth day after the date of the transaction. See the attached notice of cancellation form for an explanation of this right";

(b) The terms and conditions of payment, including the total of all payments to be made by the buyer, specifying the amount of the payments to be made to the credit service organization or to some other person;

(c) A full and detailed description of the services to be performed by the credit service 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; and

(d) The credit service organization's principal business address and the name and address of its agent in the state authorized to receive service of process.

(2) The contract shall be accompanied by a completed form in duplicate, captioned "Notice of Cancellation," that shall be attached to the contract, be easily detachable, and contain in boldfaced type the following statement written in the same language used in the contract:
NOTICE OF CANCELLATION

 

You may cancel this contract, without any penalty or obligation, within 5 days from the date the contract is signed.

If you cancel any payment made by you under this contract, it will be returned within 10 days following receipt by the credit service organization of your cancellation notice.

To cancel this contract, mail or deliver a signed dated copy of this cancellation notice, or any other written notice to:

(name of credit service organization) at

(address of credit service organization) ,

(place of business) not later than midnight

(date) .

I hereby cancel this transaction (date) .

(purchaser's signature) .

The credit service organization shall give to the buyer a copy of the completed contract and all other documents the credit service organization requires the buyer to sign at the time they are signed.

817.705. Waivers; burden of proof; penalties

(1) Any waiver by a buyer of any part of this part is void. Any attempt by a credit service organization to have a buyer waive rights given by this part is a violation of this part.

(2) In any proceeding involving this part, the burden of proving an exemption or an exception from a definition is upon the person claiming it.

(3) Any person who violates this part is guilty of a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(4) This section does not prohibit the enforcement by any person of any right provided by this or any other law.

817.706. Actions for damages

(1) Any buyer injured by a violation of this part may bring an 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 service organization, plus reasonable attorney's fees and costs. An award may also be entered for punitive damages.

(2) Any buyer injured by a violation of this part may bring an action against the surety bond or trust account of the credit service organization.

(3) The remedies provided under this part are in addition to any other procedures or remedies for any violation or conduct provided for in any other law.

817.71. Repealed by Laws 1973, c. 73-124, § 3

817.72. Repealed by Laws 1973, c. 73-124, § 3

817.73. Repealed by Laws 1973, c. 73-124, § 3

817.74. Repealed by Laws 1973, c. 73-124, § 3

817.75. Repealed by Laws 1973, c. 73-124, § 3

817.751. Repealed by Laws 1973, c. 73-124, § 3

817.76. Repealed by Laws 1973, c. 73-124, § 3

817.77. Repealed by Laws 1973, c. 73-124, § 3

817.771. Repealed by Laws 1973, c. 73-124, § 3

817.78. Repealed by Laws 1973, c. 73-124, § 3

817.79. Repealed by Laws 1973, c. 73-124, § 3

817.80. Repealed by Laws 1973, c. 73-124, § 3

Current with chapters in effect from the 2007 First Regular Session of the Twentieth Legislature through June 8, 2007
END OF DOCUMENT

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 Florida

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 Florida

Florida credit repair businesses must be knowledgeable about the statute of limitation governing debt in Florida 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.

To learn more about the statute of limitation laws for your state, click here.

Florida Credit Repair License

We’re not aware of a state requirement for a “credit repair license” to operate a credit repair business in Florida. 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 a Florida Credit Repair Business

Market Temperature:

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

79%

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Total Number of People Living In Florida

20.61 Million

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Average Debt on Credit Report

$5,700

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Percent of Population With Credit Scores Below 700

44.3%

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Percent of home buyers getting a mortgage for their home purchase

88%

How to Profit with a Credit Repair Business in Florida

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 Florida:

  • 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

TRY IT FREE!

Frequently asked questions

Why does Sunbiz matter for a Florida credit repair company?
Sunbiz might sound like a new powdered drink, but it is the official business website for the state of Florida. On this website, you can learn how to register your credit repair company, search for available credit repair business names, and see the steps involved in starting a credit repair business in Florida.
How do I start a credit repair business in Florida?
Sunbiz provides a guide for businesses looking to make Florida their home. If you want to start a credit repair business in Florida, the main steps are to do your research on Florida’s business regulations, decide your type of business (usually financial services), and form your credit repair corporation, LLC, or partnership in Florida.
Should I use a fictitious business name for my credit repair company in Florida?
It’s really neither here nor there if you want to use a fictitious business name (or “doing business as,” DBA) for your Florida credit repair business, but if you do decide on it, be sure to register it with the state of Florida. Your credit repair company may choose to do business as a different name than that with which they registered, but you need to keep everything on the up and up legally.

What Other Credit Repair Businesses Say

ROB Y

Laredo, TX

We have a tax preparation business. My partner and I decided to branch out into credit repair. Credit Repair Cloud now helps us to build our customer base for the tax business. It is a wonderful tool for lead generation. Credit-Aid provides superior customer service. You have gained a customer for life!
testimonials-bob.jpg

MANAL MASSIS

Houston, TX

I love your system! This was the best investment ever and the customer service with Credit Repair Cloud is excellent. You have a very good team. I wish companies were just like you. I've tried everybody out there and your system is very powerful. Thank you for helping me. God bless you!
MANAL MASSIS

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How to Quickly Start a Profitable Credit Repair Business

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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.