Accessing Credit Repair Services in South Dakota
South Dakota has not created any state laws for overseeing or containing the credit repair industry in the state. Even with the lack of state laws, credit repair companies that offer services in South Dakota still must comply with federal consumer protection laws enacted by the Federal Trade Commissions and the U.S. Congress. By knowing these federal laws, you can safely and legally access credit repair services in South Dakota and avoid being taken advantage of by fraudulent businesses that promise to fix your credit.
Knowing What Credit Repair Is and Is Not
The FTC and Congres clearly define what credit repair is and also stipulates what credit repair services can legally offer to clients. Under section 1679(a) 3A of the US House code 15 USC Chapter 41, Sub-chapter 11-A, credit repair services are defined as any person who utilizes any form of interstate commerce to sell, provide, or perform services to improve a customer’s credit history, rating, or record in exchange for money. The definition also extends to people who offer advice or guidance designed to help people improve or repair their credit.
However, 3B of this section goes on to say that some businesses and individuals are exempt from this law. Most notably, this code does not apply to:
- 501(c)(3) non-profit organizations
- Creditors that are helping clients restructure their debts
- Federal and state banks and credit unions
Along with outlining what credit repair is legally allowed to exist as in South Dakota and in the U.S., the code continues with its definition of what practices or services are prohibited. Credit repair services cannot make untrue or misleading statements about a person’s credit worthiness, credit standing, or credit capacity to any credit reporting bureau, a business at which the consumer has applied for credit, or to the consumer himself or herself.
Likewise, credit repair businesses cannot promise or guarantee results of services offered. They cannot, for example, promise to remove negative yet accurate information from a person’s credit history. They likewise cannot dispute accurate information with the intention of preventing or delaying this information from being reported to a person’s credit file.
Finally, this federal law says that no credit repair business can legally charge customers before each service is rendered in full. For example, if the business helps a person dispute an entry on the client’s credit history, the dispute must be submitted to and answered by the creditor or credit reporting bureau before the business can charge the customer for that service.
Credit Repair Consumer Rights
By federal law, consumers have rights when it comes to repairing or improving their own credit. Under this federal code, American citizens can legally request one free copy of their credit report from each of the three credit reporting bureaus once a year. They can also request their reports if they have been turned down for credit within the prior 60 days.
Also according to the law, people can review and dispute entries on their reports if the information is inaccurate, outdated, incomplete, or fraudulent. All three credit reporting bureaus outline how to make such a dispute. For example, it must be made in writing. People also must submit proof that the debt does not belong to them, that information is missing from the entry, or that the information being reported is wrong.
If the creditor cannot substantiate the debt or prove that the money is legitimately owed, it must remove the entry from the claimant’s report. By disputing the entry, the claimant in turn should see his or her credit score improve.
However, by law people are not supposed to dispute information that is accurate and up-to-date. They also should realize that neither they nor any credit repair service can permanently remove truthful but negative information from their reports before the entries reach their legal expiration dates. Bankruptcies are typically remove 10 years after the cases’ discharge dates. Other entries like defaulted loans, past due medical bills, or civil judgments remain on a person’s record for up to seven years.
Federal law stipulates what credit repair can and cannot be in South Dakota. By knowing these limitations, you can safely and legally improve your credit rating and report.