The Basics of Credit Repairs Services in Missouri
Like most states, Missouri closely regulates services that are designed to help people repair their credit ratings and credit scores. As you consider whether or not to contact one of these organizations, it is important that you understand its definition by state law, what services it can and cannot legally render to you, and what benefits you may receive from Missouri credit repair services.
Credit Repair Services Defined by Missouri State Law
Missouri defines a credit repair service as an entity that offers to clean up or help improve clients’ credit reports and credit ratings. The statute for this definition exists under Missouri’s state law 407.635. Businesses and organizations that operate in the state as credit repair entities are governed by section 407.635-407.644.
The state does allow some businesses and organizations to be exempt from this mandate, however. Most notably, entities like most lenders, attorneys, SEC-registered brokers and dealers, certified public accountants, and 501(c)(3) non-profit organizations are allowed to operate independently of this law.
Missouri state law also requires that credit repair services operating in the state provide a three-day opportunity to rescind and limit the collection of fees before services are rendered to clients. Likewise, these entities must also by law provide extensive disclosures of information as mandated by the state of Missouri.
Services that Can and Cannot Be Rendered through Missouri Credit Repair
Missouri permits these organizations and businesses to extend a number of different services to clients. Credit repair services can help improve a client’s credit record, history, or rating. Likewise, they can obtain an extension of credit for a client as well as provide information and advice to clients about the credit cleanup process.
Alternatively, the state’s laws regarding credit repair prevent these entities from extending numerous other services to clients. For example, a credit repair business cannot by law guarantee to erase a customer’s bad credit. Likewise, it cannot promise that the client will receive an extension of credit from a creditor or lender.
These services also cannot collect money or fees from clients before the promised work is completed. They cannot make false statements, mislead or outright lie to customers, and likewise cannot use false premises to advertise their businesses.
To ensure that these businesses and organizations adhere to the highest of standards in the state, Missouri requires a surety bond of $10,000 from them. The bond will be held by the state for two years after the company ceases operation.
Credit Repair Service Benefits
Because Missouri closely regulates credit repair services in the state, those businesses and entities in operation typically can provide several benefits to people who want to repair or clean up their credit histories and ratings. The foremost advantage that comes from using one of these services involves disputing information that is wrong or fraudulent on a person’s report.
People are advised to check their credit reports once a year to ensure that everything being reported is accurate and correct. If people see details that are wrong or fraudulent, they should make a dispute with the three credit reporting agencies immediately because this information could lower their rating.
However, many people are not sure how to file a dispute. When they need help, they can use one of these services to notify the credit reporting agencies of the wrongful information.
Another advantage comes from knowing how much each creditor on the report is owed and being able to pay off the debts with a lump sum payment made on a monthly basis. Many of these entities help consolidate the debts into a single amount and then disperse the monthly payment among the various creditors each month. After a few months or longer, the creditors are paid in full.
Many people find that making a single payment that will be distributed among the various creditors to be easier than making numerous individualized payments to them each month.
Missouri allows credit repair services to operate in the state as long as they abide by the state’s laws. You can decide if you want to pursue these services by knowing how the state defines them and what benefits they can legally extend to you in Missouri.