In Georgia, a business that offers credit repair services may not make false claims, encourage a client to forego payments or help a customer to remove accurate notes from a credit report. Georgia’s laws also prohibit companies from providing many types of credit repair services, and an individual who violates these statutes can be charged with a misdemeanor.
Eliminating Negative Notes
The state’s laws do not allow a business to dispute negative commentaries for a customer; however, a citizen may remove errors on a credit report by sending an official letter to the credit bureaus. Once each organization has received the letter, the credit bureaus must respond within 30 days.
When offering credit repair services, a company may not discourage a client from providing regular installments, and a business should not threaten to withhold payments while the company is negotiating with a lender. In contrast, a customer can sometimes offer to provide a lump sum if the creditor reduces a debt by 30 percent to 50 percent. When evaluating borrowers who had not made monthly payments for at least 180 days, one organization determined that more than 82 percent of the creditors were willing to lower the debts.
Monitoring Credit Scores
Georgia’s laws allow businesses to provide detailed credit reports for a monthly fee, and a company’s representatives may review a report and offer certain tips for the customer. Likewise, a company is able to send rapid notifications when a client’s credit score changes.
In 1987, legislators enacted the laws that stop most businesses from offering credit repair services in Georgia, yet if a company was providing these services before the legislation was created, the business can still repair the credit of clients. Georgia’s statute indicates that this exemption may be not be passed to new businesses that are not the legal successors of older companies.
A business is exempt from the statutes if the company offers financing or credit cards for customers. Furthermore, the laws do not affect any financial institution with deposits that are guaranteed by the Federal Deposit Insurance Corporation.
When operating in Georgia, a company can help a customer to determine factors that may impact a credit score, and some of these include negative notes, the median age of accounts, the number of open accounts, the percentage of payments that were completed on time and the amount of inquiries. Moreover, a client can reduce the ratio of debt to credit by obtaining additional credit from a lender.
Aspects of Services
If a business offers credit repair services for clients in Georgia, the contract must specify the duration of the services, indicate the overall costs, determine terms that are related to payments and describe any guarantees. In addition, the legislation specifies that a company may not discourage a customer from making contact with the credit bureaus, and in Georgia, a business should explain other strategies that could reduce a client’s debts.
Making Claims and Promises
According to the Fair Business Practices Act, a company’s representatives must not falsely claim that the business is able to remove negative notes from a credit report, increase a client’s credit score or eliminate debts. Additionally, the legislation stops companies from providing credit repair services before the client has signed a contract with a cooling-off period of three days.