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Credit Repair Business 101 COMPLIANCE!!

Ok Gang… The Credit Repair Industry can be a lucrative business… Fortunes can be made while helping countless consumers change their lives… I admire the fortitude of many of the industry’s leading professionals in working to help consumers. Regardless of your intentions, and the quality of results you get for consumers- it is VERY possible that you are not operating within the law!!

SOOOOO what that means is … even if you are the best at what you do- and consumers are happy and you think everything is going well… in an instant the rug could be pulled out from under you by the regulators!

The Credit Repair Organizations Act commonly known as CROA is Federal legislation that governs ALL credit repair organizations. NO ONE is EXEMPT from the act…. INCLUDING ATTORNEY’S !!!!

The Act has many consumer protections contained therein… as well as provisions that could inhibit certain businesses… The act was born out of necessity – due to the overwhelming amount of complaints from consumers being defrauded by credit repair companies….

My TRUE belief is that people don’t get into the credit repair business with the intentions of defrauding consumers… Maybe I have visions of grandeur and I am living in a fantasy world… BUT I truly believe that the “Bad Guys” in the credit repair industry are born out of ill execution, not ill intention…

As you will learn soon, there are an abundance of credit repair business laws. But the credit repair business laws are not always commonly known! The business has virtually no self regulation, and until recently has not organized itself at all… now with the emergence of CreditBootCamp information about the industry is being circulated much more!

Soooo the problem starts with accessibility of information and people willing to help and share… Until the credit boot camp, there was no “non self-serving” education available for those who operate a credit repair business. Credit repair training still is not a widely known or accepted function in the industry. Most industries have formal methods to train and educate about the business…

BUT this business has not… That is one of the reasons for my blog… I want this industry to rid itself of the stigma’s and become a respectable industry to be a part of… I know- if you are reading this article this far… You do TO!!! So…. Read on and help to make the industry better… share information that can help consumers… and be a part of something that you can be proud to be a part of…

This starts with making sure that you are compliant with all state and federal statutes and understanding how to maintain compliance… Compliance doesn’t start and end with the law… You should always have higher standards for your company… I analogize it with the building industry… In the building industry- if a contractor were to state “I build everything exactly to County and State construction CODE” ….. ultimately what he is saying is he builds it to the minimum standard allowed by law to be built… and he is doing the minimum to get by….

I always believe in standing out from the norm… There are many ways that you can in this biz… first is to understand what the “Minimum” standard requirements are… Then… find ways to ensure that perception is correct… because even if you are doing things perfectly legitimately, if it is perceived or could be perceived that you aren’t… you might as well be guilty… because PERCEPTION IS REALITY!!!

So be sure to do a “Perception Test” of all your materials … this test should have higher standards than a simple compliance test…

So… here’s some of the details of the law:

#1 – Don’t make deceptive claims
Do not make false representations or guarantees. It is important to understand there are no guarantees involved with Credit Repair. Just like in a court of law, an attorney could never guarantee a client that the judge or jury would find in their favor. It is also important that you do not lie or misrepresent your credit repair services. Honesty is the best approach. If you want to make claims about how successful your services are, give actual statistics and examples of what your other clients have experienced. “Our average clients see 4 – 10 items removed in 90 days” is a great way to pitch your service. Remember, you don’t have to lie or deceive to sell your service. The largest credit repair organizations out there are still in business because they are truthful.

#2 – Ask you clients which items to dispute
The second biggest violation credit repair companies make is disputing items that are known to be accurate. Although it is a rare thing to find credit reports “completely accurate” across all three credit bureaus, if the client indicates that “yeah, that is right” then you better leave that item alone. As Brad Elbein, Director of the FTC’s Southwest Regional Office says “no credit repair company has the right to remove accurate, current information from a credit report.” Stick with disputing items the client instructs you to. This is as simple as taking 10 minutes to run over the credit report with your client. Using, you can input customer instructions, such as “My payment was never late”, into the software for each item.

#3 – Provide consumers with their rights
As a credit repair organization, you must provide a copy of the “Consumer Credit File Rights Under State and Federal Law” before you have your client sign a contract. You must also inform your client that they have a right to cancel your contract. Visit to get a copy.

#4 – Make sure you have a contract in place
If you don’t already have one in place, you must get a contract in place immediately. Make sure your contract hits these talking points:

  • The payment terms for services, including their total cost
  • A detailed description of the services to be performed
  • Any guarantees or refund policies (if offered)
  • Power of attorney
  • The expected time it will take to achieve results (use estimates)
  • A copy of the FTC’s “Consumer Credit File Rights”
  • A cancellation notice (in bold font). Clients have 3 business days afterwards to legally cancel.
  • Your company’s name and business address

You can find tons of sample credit repair agreements on the internet by Google’ing “credit repair agreement”. However, I recommend you have a lawyer look over the contract to ensure its legality. Make sure you have the client sign and date it (in ink). Make 2 copies of the agreement, one for the client’s records and one for yours. It is a MUST to keep copies of your clients’ contracts for a minimum of 2 years.

#5 – First perform then collect payment
That’s right, perform credit repair services then collect money. Seems like a backwards way of billing but the CROA states a credit repair organization is not allowed to collect payment for any services that have not been performed. The organization can only collect payment after they have performed their end of the deal. This is why I recommend monthly billing. (See my article on fixed vs. monthly billing.) With monthly billing, you are billing for work previously performed.

Now… that may seem like a bit harsh to some of you…. But the reality is – you can’t change it…. And you can still make a fortune staying within the boundaries of it..

Ok… as I mentioned – you don’t want to be like the contractor who does the minimum standard… you want everything to be above and beyond the requirements of the law…

So…. Here are some tips for your credit repair business:

Prepare yourself for an audit or investigation… The fact is this…. If you run a business that is successful, at some point you will have a complaint with a regulator… I know what you’re thinking… “If you do the right thing- no one will complain”…

BUT this blog is about reality not FICTION…

Reality is- there are unreasonable people and stupid employees out there…. Along with BAD DAYS… Everyone has a bad day… Sooo… if you do enough business you will run into a problem with a bad employee doing the wrong thing, a customer who is wrongfully dissatisfied, or you simply messing up… It will happen… BUT- you must be able to prove that this complaint was an isolated incident….

If you don’t prepare for this complaint and remain proactive- then you will not have the ammunition needed to win the audit and stay in business…. In the eyes of the auditor/regulator you are guilty until proven innocent and this “first” complaint is just the first time you were caught… most likely they will think that you fracture the law repeatedly, lie, cheat, and steal like many of the people that they investigate…

WOW… you have a lot to overcome… and many people will have to adjust their business and that’s ok… Many people have asked me, what to do to convince the regulators that you are one of the good guys…

The only thing that can do that is PROOF…. You must be able to provide proof of your intent to do the right thing… now proof of your intent to do right, does not necessarily excuse you of doing wrong in the credit repair business, but it will help!

Now, how do you prove it….
One of the problems of the credit repair business is accepting clients into a credit repair program that cannot benefit from the program. Some consumers are better served with debt settlement as alternatives to credit repair. Many successful credit repair companies forge relationships with bankruptcy attorneys and debt settlement companies so they have a means to refer clients who are better served with those resources… But… you must have the proof…. What I suggest is keeping a companywide log of the clients that you do not accept into the program….. Mark the reason for not accepting the client, along with the clients name and contact information.

Advanced credit repair software, or credit repair management software is not needed for this- a simple spreadsheet will do the trick for most credit repair companies. NOW… once you have this company wide list- you can easily show PROOF to a regulator that you do what you say…

Saying that you don’t approve just anyone for your program means nothing…. BUT showing proof of all of the people that you have denied access to your program will mean a lot!

Keep an eye out for upcoming posts on successful habits of legal, moral and ethical credit repair companies.
I hope this article helps shed some light on credit repair business laws. Be sure to stay in compliance for business longevity. Also, you can check out an almost 2 hour webinar that I did with an industry compliance expert here:


Please comment on your thoughts of the article and share this with others in the industry

Your friend in the credit biz,
Mike Citron

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  1. Garr Russell says:

    What a great article! The integrity that Mike and his staff have to put up info that not only holds him accountable but the credit repair industry as a whole. I applaud your efforts to protect the consumer.

  2. Ned says:

    You are making it very hard for someone to consider missing your webinars. Right now I feel if I miss a webinar I will miss the opportunity to get more valuable tips that will take my business to the next level. Keep up the great job Mike.

  3. richard rago says:

    Mike, Wow I can’t belive I have actually found someone who actually cares about the consumer before the buck!!!! I can’t agree more… I love the webinars that you hold weekly and would love to get copies of the letters and and be put on the list for the software from today’s July 23rd Webinar. Please keep up the good work!!!!

  4. Jp Ology says:

    Mike, you consistently knock the ball out of the park every time your up to bat, you truly are a pioneer, keep blazing trails, and circling the wagons aka webinars. Mike is the John Wayne of the credit repair industry YeeHah!

  5. nick carrara says:

    I thoroughly enjoyed your webinair on July 23. I found the debt settlement letters particularly helpful and I look forward to receiving copies of them as well as the software for presentations.

    Just wanted to let you know that because of the information you gave on last week’s webinair, I have scheduled appointments with various real estate brokers and bankers, who seem to express interest in educating their customers.

    Many thanks for valuable information and I look forward to your next webinair.

  6. Joyce says:

    Excellent Article! I now feel that I can start expanding my business because there are others that want to see legal, moral and ethical credit repair companies and are willing to share the knowledge and guidance to make us all better.

    Thanks Mike Citron for all you do!

  7. Joyce says:

    The Webinar today was awesome. I especially like the Sales Pitch “System” you spoke on. WOW! How simple, yet so powerful.

    Please send: Copy of Presentation, Software for Video and last week’s Bio template. (All of this for free…Oh my, my, my).

  8. Paul says:

    Excellect take on what is lawful in the Credit Repair business and in anything dealing with the Credit Business. Also the webinar was Fantastic, great insite wioth this Article

  9. Everytime I attend the webinar you consistently provide valuable information. I am hooked and you can expect to see me every Thursday. Thank you.

  10. Lon Dunn says:

    Affirming Our Committment to Legal, Ethical and Honest Practices is shown in our Daily Presentation to Clients and Affiliates. If we are doing our jobs properly, we will not have any trouble when the FTC comes calling. They will not be having to check on our websites at night, when we are asleep. It will show on all of our scripts, paperwork and communications. Doing this the right way means never having to make excuses to our clients.

    WRITING DISPUTE LETTERS IS NOT A GET RICH QUICK SCHEME and anyone who approaches this like that is going to be sadly mistaken.

    It is however a way in which to CREATE A PIPELINE OF PROFITS and REGULAR, STABLE INCOME IMPROVING OTHER PEOPLE’S LIVES and Creating a Network of Professionals who trust us to perform ethical, honest and legal practices.

    I have all of my Affiliates saying that we provide DISPUTE LETTER SERVICES, not “Credit Repair”. We say DISPUTE SERVICEs to describe what we do….. Then the client says: “What is that?” Well, folks that is a BUYING SIGNAL…Anyone who asks “What is dispute services, what does dispute letter services mean?” Is asking me to sell them my product!!

    It is just as easy to make money legally and honestly, we do not have to get paid up front. It is only compliant when I provide my service FIRST, do all the work, then get paid.

    And Mike’s efforts to instill that in all of us will be one of the keys to restoring this Industry’s reputation.

    Lon, Alexandria VA

  11. I like your emphasis on sharing information with one another in this industry to bring the standards of the industry up and, as a result, raising its reputation. This is a consistent theme of Mike Citron’s, which was brought up on yesterday’s webinar. Any example of this was Peggy’s willingness to assist other credit repair companies by sharing her debt settlement letters with those who attended yesterday’s webinar. Mike is correct when he says that instead of giving away business when we share with other credit repair companies, we will ultimately have more business when consumers realize that credit repair organizations can be trusted.

  12. Daniel says:

    Great webinar! Very informative. Please send those great debt settlement letters and software and a copy of the presentation when you can. Thank you!

  13. Lon Dunn says:

    We do not even deposit the check until the 72 hours has passed. We do all of our letters in a “WORK FIRST” environment where the client actually Receives something for their money! This way, there will NEVER, EVER be a client that says they did not get what they pay for.

    So we do all the work first, and STILL WAIT 72 hours. Would rather be OVER COMPLIANT, than walking a fine line.

  14. Great Blog. Will you send me your dispute suite powerpoint presentation, bio template and the book Think or Grow Rich? I will be watching more videos and reading all of your articles.

  15. Very excellent post on compliance Mike!

    Thanks again for your commitment to ongoing education both in your blog and weekly webinars.



  16. Julia Smith says:

    Love this post!! Read and re-read it. Starting a business is nerve wracking at best and having you as a mentor is making this a much smoother ride – and exciting!!!

  17. Julia Smith says:

    Love this post!! Read and re-read it. Starting a business is nerve wracking at best and having you as a mentor is making this a much smoother ride – and exciting!!!

  18. I love your articles and your webinars. It is great to have someone that cares about the customer first. I am “hooked” and committed to reading all of your articles and attend all of the webinars. I would like to receive a copy of Peggy’s letters and the free application software. I am trying to get to Vegas. I don’t want to miss Boot Camp.

  19. Cynthia says:

    Great Stuff!!!!
    I really enjoy your webinars!!! I requested you as a friend on MS,FB, LI, I didn't get a chance to do a tweet- but I did do it today!

    If there is any way you could please send me the free starter guide I would really REALLY appreciate it!!!
    Thank you!!!

  20. Patricia Tenney says:

    Great article, love the fact that you are bring the Law, correct way to legally help people. There are too many organizations that jump on a band wagon not having a clue what they are doing and harm the consumer in the long run.
    I also listened to your SEO Insider Secrets and Web 2.0 webinar. Lots of good information. I would like to have your SEO Kit and lists that you spoke about in your webinar.

  21. trevor says:

    wow this was great

  22. Guest says:

    The team at is clearing a path and laying a foundation that will "rebuild" the credit repair industry's "credibility" (no puns intended) ! You leave us hanging with eager anticipation!

  23. Phil Hogg says:

    We need to hear more on compliance. With Red flag coming at us it would be great to have a blog dedicated to this subject.

  24. Blair Warner says:

    Great webinar today. Real, helpful stuff. I'm going online all the way in 2010!


  25. Cheryl says:

    Great article and links on compliance. Yesterdays webinar was very informative. I don't have a website yet because (1) didn't know how and (2) I'm not prepared if I get several leads. Thanks for offering web templates and videos.

  26. Kim says:

    Good Day Mike,

    I went to this article because you spoke about compliance again and it made me revisit. I think that contract you spoke about will be awesome and it will definately unify those of us who you educate. I am interested in obtaining it as soon as it becomes available. Thanks again.

  27. Troy Hitt says:

    Holy Crap! Don't wanna be a CRO in Colorado. Great information today Mike. Thanks again to Dominic for expert compliance outlook. Wow! Mike that is a great script and I can't wait to see the video. Sounds like this will dispell many of our clients concerns. Jon Goldman says show your warts! The script exposes the industries warts and how we can help. Thanks Mike!

    Troy Hitt
    Houston "By God" Texas

  28. Latoya N. says:

    this was my first Webinar… was great. valuable information received. I understand about compliance and rendering services appropriately. Thank you.

  29. frank Green says:

    Great info and links on compliance. Today's webinar was very informative.
    We need to hear more on compliance

  30. Packard says:

    Thanks for the great information, the 2/24/10 Webinar was so informative. I'm so pleased that I found your site.

  31. Giovanni says:

    Listening to your webinar on 3/10/10 I realize that there will NEVER be a time when I can say that I know everything there is to know about credit restoration. First of all its "credit restoration" not "credit repair". Repairing someone's credit does not involve strategy, passion to get it done and true knowledge of the industry. Restoring someone's credit involves an expert and the devotion of someone who really wants to help an individual who needs it. Anyway, since I started in this industry I learn on a daily basis how unscroupulous the credit bureaus are. I have built some personal anger against them and that truly helps me help others who cant go about their daily lives simply because some credit agency and collection agency says so. I must say that at the same time, I have met customers that I have refused to help because they are not interested in restoring their credit for legitimate reasons.

  32. Steven Klein says:

    I am very impressed with all aspects of Dispute Suite, your guidance and support, and communication from day 1! It's been very comforting as we launch into the credit repair business this month.
    In an industry filled with corruption, deception, greed, and gossip, you and your referred contacts have conducted yourselves with honesty, integrity, character, and an incredible amount of value, knowledge, and guidance.
    The webinar on compliance with Dominic was very well done and extremely informative, and I learned of this website from that webinar. So I visit this site, and I'm even more impressed!
    Thanks for being a stand for the millions of people out there who need credit repair and for me, my business partners, and all the others out there who want to service those millions of prospective customers!
    I look forward to the upcoming bootcamp and to a successful business and personal relationship in the future!
    And I'll tell you that as the "SuperKonnector", not only am I committing to being a shining example as a client of Dispute Suite, but I am also committed to making sure you benefit from some of the relationships that I have or will have in the future anywhere there is a fit for your dreams and goals!
    Thanks for the roadmap to success! We'll stay on the path!
    Sincerely, Steven Klein "SuperKonnector"

  33. Laura Tyson says:

    Mike, your webinar on the “new laws” was VERY informative. One of the best was when you gave suggestions on marketing to real estate agents (mortgage professionals as a whole). I’m IN for every webinar. Thanks

  34. John George says:

    Great seminar today. Looking forward to meeting you one day.

  35. Yusheeka Davis says:

    Hey Mike! I just got off the webinar today regarding NARCRA / Q&A and man was that an absolutely great call … AS USUAL! I’ve been MIA for a few weeks but I’m extremely excited about NARCRA and all the great things you have lined up for the industry. I appreciated the Q&A as well … I actually learned some new stuff today and took some great notes! BTW, what’s the “Expert Witness Course and BK Lit” all about? I must’ve missed the buzz about this but am most definitely very interested. Can you send some me some details?

    All the best Mike,


  36. Zissy Goldring says:

    Great call today lots of good information. Would love the identity theft handbook.

  37. Mary says:

    Great article. Thanks for another great webinar. I would love to see these recorded so that we could go back and replay time and time again. You said you would send out information and a handbook for ID theft. Please send it my way. I am also interested in your books titled: Exposed. How do I find those?
    Mary Johnson

  38. Algen Albritten says:

    Great Webinar! Left me very informed and confirmed I'm going on the right path. Especially the explanation of the recent court decision and what it means to all of us!

  39. Stephen says:

    In the state of GA would I have to operate as a non-profit organization ? You had mentioned that other entities would be non compliant. I have a GA LLC.

  40. Chris says:

    Right on target. Compliance is a must and it is actually easy to do once you know the rules. Great information.

  41. Lori-Ann says:

    Gentlemen: Continue to love the webinars and the information you are providing us. Each week, we get more and more out of it! Thank you! I am interested in receiving the information that you mentioned in today's webinar as well as last weeks.
    Thank you and we will be here again next week!

  42. Jeremy says:

    Great article Mike, as usual. I think you mentioned this in a webinar, but I couldn't remember for sure and couldn't find the answer on this site, so here's the question:

    If a business owner does not fix the consumers credit, but is simply a consultant, are they still under the CROA guidelines?

    Not sure if giving the advice to a client, but not actually doing the work would place them under the rules of the CROA.

    Any insights into this would be great. Thank you!

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