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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 Massachusetts

There are federal and state laws for Massachusetts. 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

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

Massachusetts State Laws

CHAPTER 93. REGULATION OF TRADE AND CERTAIN ENTERPRISES
REGULATION OF CREDIT BUREAUS

CHAPTER 93. REGULATION OF TRADE AND CERTAIN ENTERPRISES REGULATION OF CREDIT BUREAUS

Chapter 93: Section 68A. Definitions
 
Section 68A. For the purposes of sections sixty-eight B to sixty-eight D, inclusive, the following words, unless the context requires otherwise, shall have the following meanings:—

“Buyer”, any individual who is solicited to purchase or who purchases the services of a credit services organization. “Credit services organization”, any person who, with respect to the extension of credit by others, sells, provides, performs, or who represents to sell, provide or perform for the payment of money or other valuable consideration any of the following services: (i) improving a buyer’s credit record, history or rating; (ii) obtaining an extension of credit for a buyer; or (iii) providing advice or assistance to a buyer with respect to either clause (i) or (ii); provided, however, that such term shall not include (a) any person authorized to make loans or extensions of credit under the laws of the commonwealth or the United States, (b) a lender approved by the Secretary of Housing and Urban Development of the United States for participation in any mortgage insurance program under 12 USC 1701 et seq. (National Housing Act), (c) any bank whose deposits or accounts are eligible for insurance by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, or any subsidiary of such bank, (d) any credit union authorized to do business in the commonwealth under state or federal law, (e) any nonprofit organization exempt from taxation under Section 501(c)(3) of the federal Internal Revenue Code, (f) any person licensed by the commonwealth as a real estate broker when acting within the scope of such license, (g) an attorney at law authorized to practice in the commonwealth when acting within the scope of such practice, (h) any broker-dealer registered with the Securities and Exchange Commission or the Commodities Futures Trading Commission of the United States when acting within the scope of such registration, or (i) any consumer reporting agency as defined in 15 USC 1681 et seq. (Fair Credit Reporting Act). “Extension of credit”, credit extended to a buyer primarily for personal, family or household purposes including the right to defer payment of debt or to incur debt and defer its payment.

Chapter 93: Section 68B. Credit services organization; restrictions
 
Section 68B. No credit services organization, its salespersons, agents or representatives, or any independent contractor who sells or attempts to sell the services of a credit services organization shall (1) charge or receive any money or other valuable consideration prior to full, complete and satisfactory performance of the services the credit services organization has agreed to perform for the buyer, unless such organization has obtained a surety bond in an amount not less than ten thousand dollars issued by a surety company authorized to do business in the commonwealth and has established a trust account at a federally insured bank or savings and loan association located in the commonwealth; (2) charge or receive any money or other valuable consideration solely for the referral of a buyer to a retail seller who will or may extend credit to the buyer if such extension of credit is upon substantially the same terms as those available to the general public; (3) make, or advise any buyer to make, any statement that is untrue or misleading, or that should be known by the exercise of reasonable care to be untrue or misleading, with respect to a buyer’s credit worthiness, credit standing or credit rating to a credit reporting agency or to any person who has extended credit to a buyer or to whom a buyer has made application for an extension of credit; (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 any act, practice or course of business intended to defraud or deceive a buyer in connection with the offer or sale of such services.

Chapter 93: Section 68C. Written statement provided to buyer; contents
 
Section 68C. Before the execution of a contract or other form of agreement between a buyer and a credit services organization or before the receipt by any such organization of money or other valuable consideration, whichever occurs first, such organization shall provide the buyer with a statement, in writing, containing the following:

(1) a complete and accurate statement of the buyer’s right to review any file on the buyer maintained by a consumer reporting agency, as provided under 15 USC 1681 et seq. (Fair Crediting Reporting Act);

(2) a statement that the buyer may review his consumer reporting agency file at no charge if a request therefor is made to such agency within thirty days after receipt by the buyer of notice that credit has been denied;

(3) if such request is not made within the allotted time, the approximate charge to the buyer for such review;

(4) 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 a consumer reporting agency;

(5) a complete and detailed description of the services to be performed by the credit services organization and the total cost to the buyer for such services;

(6) a statement asserting the buyer’s right to proceed against the surety bond or trust account required under section sixty-eight B; and

(7) the name and business address of any such surety company and of the depository of the trust account, together with the name of the trustee and the number of the account.

Chapter 93: Section 68D. Contract between buyer and credit services organization; requirements
 
Section 68D. Each contract or other form of agreement between a buyer and a credit services organization for the purchase of the services of such organization shall be in writing, dated, signed by the parties, and include the following:

(a) a conspicuous statement in a minimum size of ten point bold face type, in immediate proximity to the space reserved for the buyer’s signature, which reads: You, the buyer, have the right to cancel this contract or agreement at any time prior to midnight of the third business day following the date thereon.

(b) a form, in duplicate and captioned “NOTICE OF CANCELLATION”, attached to the contract or agreement and containing, in a minimum size of ten point bold face type, the following:

NOTICE OF CANCELLATION.

You have the right to cancel this contract, or agreement, without any penalty or obligation until midnight of the third business day following the date on which such contract or agreement was signed.

If you cancel, any payment made by you will be returned within ten days following receipt of your cancellation notice.

To cancel this contract or agreement, mail or deliver a signed and dated copy of this notice of cancellation, or other similar written notice to

     (credit services organization)         at                 (business address)


____________________________      ___________________________
                   (date)                                               (buyer's signature)     

____________________________      ___________________________

(c) 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;

(d) 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 to be performed will be completed or the estimated length of time for the completion of such performance; and

(e) the principal business address of the credit services organization and the name and address of its agent in the commonwealth authorized to accept service of process.

The credit services organization shall maintain on file for a period of two years an exact copy of such statement, personally signed by the buyer acknowledging receipt of a copy of the same.

The credit services organization shall provide the buyer with a copy of the total contract or agreement, together with copies of all other documents which the credit services organization requires the buyer to sign at the time they are signed.

Chapter 93: Section 68E. Violations
 
Section 68E. Any violation of sections sixty-eight B to sixty-eight D, inclusive, shall constitute a violation of chapter ninety-three A. 
Case Law I identified no significant cases construing this statute.

§ 393.003. Waiver Void

(a) This chapter does not apply to:

(1) a person:


(A) authorized to make a loan or grant an extension of consumer credit under the laws of this state or the United States ; and

(B) subject to regulation and supervision by this state or the United States ;

(2) a lender approved by the United States secretary of housing and urban development for participation in a mortgage insurance program under the National Housing Act (12 U.S.C. Section 1701 et seq.);

(3) a bank or savings association the deposits or accounts of which are eligible to be insured by the Federal Deposit Insurance Corporation or a subsidiary of the bank or association;

(4) a credit union doing business in this state;

(5) a nonprofit organization exempt from taxation under Section 501(c)(3), Internal Revenue Code of 1986 (26 U.S.C. Section 501(c)(3));

(6) a real estate broker or salesperson licensed under Chapter 1101, Occupations Code, who is acting within the course and scope of that license;

(7) an individual licensed to practice law in this state who is acting within the course and scope of the individual's practice as an attorney;

(8) a broker-dealer registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission acting within the course and scope of that regulation;

(9) a consumer reporting agency;

(10) a person whose primary business is making loans secured by liens on real property;

(11) a mortgage broker or loan officer licensed under Chapter 156, Finance Code, who is acting within the course and scope of that license; or

(12) an electronic return originator who:

(A) is an authorized Internal Revenue Service e-file provider; and

(B) makes, negotiates, arranges for, or transacts a loan that is based on a person's federal income tax refund on behalf of a bank, savings bank, savings and loan association, or credit union.


(b) In an action under this chapter, a person claiming an exemption under this section has the burden of proving the exemption.

§ 393.101. Registration Statement

(a) This chapter does not apply to:

(1) a person:


(A) authorized to make a loan or grant an extension of consumer credit under the laws of this state or the United States ; and

(B) subject to regulation and supervision by this state or the United States ;

(2) a lender approved by the United States secretary of housing and urban development for participation in a mortgage insurance program under the National Housing Act (12 U.S.C. Section 1701 et seq.);

(3) a bank or savings association the deposits or accounts of which are eligible to be insured by the Federal Deposit Insurance Corporation or a subsidiary of the bank or association;

(4) a credit union doing business in this state;

(5) a nonprofit organization exempt from taxation under Section 501(c)(3), Internal Revenue Code of 1986 (26 U.S.C. Section 501(c)(3));

(6) a real estate broker or salesperson licensed under Chapter 1101, Occupations Code, who is acting within the course and scope of that license;

(7) an individual licensed to practice law in this state who is acting within the course and scope of the individual's practice as an attorney;

(8) a broker-dealer registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission acting within the course and scope of that regulation;

(9) a consumer reporting agency;

(10) a person whose primary business is making loans secured by liens on real property;

(11) a mortgage broker or loan officer licensed under Chapter 156, Finance Code, who is acting within the course and scope of that license; or

(12) an electronic return originator who:

(A) is an authorized Internal Revenue Service e-file provider; and

(B) makes, negotiates, arranges for, or transacts a loan that is based on a person's federal income tax refund on behalf of a bank, savings bank, savings and loan association, or credit union.


(b) In an action under this chapter, a person claiming an exemption under this section has the burden of proving the exemption.

§ 393.001. Definitions

(a) This chapter does not apply to:

(1) a person:


(A) authorized to make a loan or grant an extension of consumer credit under the laws of this state or the United States ; and

(B) subject to regulation and supervision by this state or the United States ;

(2) a lender approved by the United States secretary of housing and urban development for participation in a mortgage insurance program under the National Housing Act (12 U.S.C. Section 1701 et seq.);

(3) a bank or savings association the deposits or accounts of which are eligible to be insured by the Federal Deposit Insurance Corporation or a subsidiary of the bank or association;

(4) a credit union doing business in this state;

(5) a nonprofit organization exempt from taxation under Section 501(c)(3), Internal Revenue Code of 1986 (26 U.S.C. Section 501(c)(3));

(6) a real estate broker or salesperson licensed under Chapter 1101, Occupations Code, who is acting within the course and scope of that license;

(7) an individual licensed to practice law in this state who is acting within the course and scope of the individual's practice as an attorney;

(8) a broker-dealer registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission acting within the course and scope of that regulation;

(9) a consumer reporting agency;

(10) a person whose primary business is making loans secured by liens on real property;

(11) a mortgage broker or loan officer licensed under Chapter 156, Finance Code, who is acting within the course and scope of that license; or

(12) an electronic return originator who:

(A) is an authorized Internal Revenue Service e-file provider; and

(B) makes, negotiates, arranges for, or transacts a loan that is based on a person's federal income tax refund on behalf of a bank, savings bank, savings and loan association, or credit union.


(b) In an action under this chapter, a person claiming an exemption under this section has the burden of proving the exemption.

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 Massachusetts

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 Massachusetts

Massachusettscredit repair businesses must be knowledgeable about the statute of limitation governing debt in Massachusetts 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.

Massachusetts Credit Repair License

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

6.81 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 Massachusetts

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 Massachusetts:

  • 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

How do I make my Massachusetts credit repair company official?
In Massachusetts, like most states, you have to register your credit repair business with the state so they can process your business tax, ensure you’re following regulations, and eventually provide support and guidance when you start hiring employees to help run your business. To register with the Secretary of the Commonwealth, click here and follow the instructions on the page.
Why should I run my credit repair business in Massachusetts?
Massachusetts not only offers business counseling for new businesses in the state, but also has nine regional business development organizations. If you want to understand the market research, best ways to advertise locally, and how other local business owners are finding success, you may want to look into starting your credit repair business in Massachusetts.
What are the tax laws and other details I need to know for a Massachusetts credit repair business?
You can figure out the tax laws and regulations that affect your credit repair company by looking at the informational sections by business structure on the Massachusetts state business website. In addition, we recommend you consult with a tax accountant and an attorney to be certain you are setting your credit repair business up in the best and most profitable way for this state.

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

MINUTESSECONDS
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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. . .

Secret 3

How our easy method gets you UNLIMITED Clients without paying for advertising. . .

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.