Understanding Credit Repair Laws in Georgia
Is credit repair legal in Georgia? The short answer is no – operating a credit repair business is generally illegal in the state. Georgia law prohibits most credit repair services and makes it a misdemeanor offense to run a credit repair company.
Specifically, Georgia Code § 16-9-59 states that “A person commits the offense of operating a credit repair services organization when he or she owns, operates, or is affiliated with a credit repair services organization.” This law defines credit repair services as attempting to improve a buyer’s credit record, history, or rating for a fee.
Why is Credit Repair Restricted in Georgia?
The restrictions on credit repair in Georgia aim to protect consumers from potentially predatory practices. Some key reasons for the laws include:
• Preventing companies from charging upfront fees for services they may not deliver
• Stopping false promises about being able to remove accurate negative information
• Discouraging tactics that could worsen a consumer’s credit situation
While the intent is consumer protection, these laws do limit options for Georgians seeking help with credit issues.
Are There Any Exceptions?
The law does provide a few narrow exceptions, including:
• Nonprofit organizations with 501(c)(3) tax-exempt status
• Licensed attorneys providing services within their legal practice
• Banks, credit unions, and other regulated financial institutions
However, for-profit credit repair companies are generally not permitted to operate in Georgia.
Legal Alternatives for Georgia Residents
If you’re a Georgia resident looking to improve your credit, some legal options include:
• Working directly with creditors to negotiate debts
• Consulting with a nonprofit credit counseling agency
• Seeking advice from a licensed attorney specializing in credit issues
• Reviewing your own credit reports for errors and disputing inaccuracies yourself
While these methods may require more effort, they allow you to address credit concerns without running afoul of Georgia law.
Red Flags to Watch For
Even though credit repair companies are restricted in Georgia, some may still attempt to operate illegally. Be wary of any company that:
• Promises to remove accurate negative information from your credit report
• Asks for upfront payment before providing any services
• Advises you to dispute all information on your credit report
• Suggests creating a new credit identity
These tactics are not only illegal but could potentially worsen your credit situation.