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Learning about the credit repair law in Illinois is important in getting a credit repair service to fix credit or building your own credit repair business in the state.

Illinois is the 6th most populated state in the USA with over 12.6 million population. 49% of these people have subprime credit which means that they are paying high-interest rates on their car loans, mortgages, credit cards, and others. According to statistics, 30% of the Illinoisans have a credit score below 601. This means that 3.8 million Illinoisans need to improve their credit score to qualify for a mortgage loan. Moreover, there are still people who have no credit history and need to build credit. 

That is why credit repair services are booming and in demand in the state of Illinois. This provides a great opportunity for credit repair specialists who wish to build a business in the state. If you’re one of them, read through to have a guideline for your company in regards to legalities. 

Many people who experience credit problems may seek assistance from credit repair services to help them improve their credit score. Or for others, to build credits. Act 605 which is known as the “Credit Services Organization Act” is written to provide the consumers of credit repair services companies: (1) with the necessary information to help them make an informed decision regarding the offered services. And (2) to protect them from unfair and deceptive advertising and business practices.


Learn about the prohibited acts, consumer statement, contract, surety bond, and damages permitted under the Illinois Credit Repair Laws.


What are the prohibited acts according to credit repair law in Illinois?

Credit Repair Law in Illinois

No credit repair company, its salespersons, representatives or agents, who sells or attempts to sell credit repair services shall:

  • Receive or charge any payment before the full performance of the services that the credit repair company has agreed to perform for or on behalf of the buyer unless the credit repair company has obtained a surety bond issued by a surety company licensed to do business in the State of Illinois. If a credit repair company complies with this the salespersons, agents, and representatives who sell the credit repair services of such organization shall not be required to obtain the surety bond provided for by this Act.
  • Received or charge any payment solely for the referral of the buyer to a credit repair service provider who will or may extend credit to the buyer if such extension of credit is in substantially the same terms as those available to the general public.
  • Advise any buyer to make any statement that is untrue or misleading, with respect to the buyer’s credit reporting agency or to whom a buyer has made an application for an extension of credit.
  • Make any untrue or misleading representations in the offer or sale of the services of a credit repair company or engage, directly or indirectly, in any act, practice, or course of business intended to defraud or deceive a buyer in connection with the office or sale of such services; including but not limited to: the amount or type of credit a consumer can expect to receive as a result of the performance of the credit repair services offered; the qualifications, training or experience of its personnel; or the amount of credit improvement the consumer can expect to receive as a result of the services.


What should a consumer statement contain according to Illinois credit repair law?


Before the execution of a contract or other form of agreement between a buyer and a credit repair service provider or before the receipt of money or other valuable consideration by the service provider, whichever occurs first, the company or the credit repair service provider shall provide the buyer with a written statement containing the following:

  • A complete and accurate statement of the buyer’s right to review any file on the buyer maintained by a consumer reporting agency, as provided under the Fair Credit Reporting Act (15 U.S.C. Section 1681 et seq.)
  • A statement that the buyer may review his consumer reporting agency file at no charge if a request, therefore, is made to such agency within thirty days after receipt by the buyer of notice that credit has been denied and if such request is not made within the allotted time, the approximate charge to the buyer for such review.
  • A complete and accurate statement of the buyer’s right to dispute the completeness or accuracy of any item contained in any file on the buyer maintained by a consumer reporting agency
  • A complete and detailed description of the services to be performed by the credit repair service provider and the total cost to the buyer for such services.
  • A statement notifying the buyer that: (i) credit reporting agencies have no obligation to remove information from credit reports unless the information is erroneous, cannot be verified, or is more than 7 years old; and (ii) credit reporting agencies have no obligation to remove information concerning bankruptcies unless such information is more than 10 years old.
  • A statement asserting the buyer’s right to proceed against the surety bond required under Section 10 (Surety Bond) of this Act.
  • The name and business address of any such surety company together with the name and the number of the account.

The credit repair service provider shall maintain on file, for 2 years after the date the statement is provided, an exact copy of the statement, signed by the buyer, acknowledging receipt of the statement.


What should the contract contain following the Illinois credit repair organization act?

Each contract between the buyer and the credit repair service provider for the purchase of the services shall be in writing, dated, and signed by the buyer, with the following details:

  • a conspicuous statement in boldfaced type, in immediate proximity to the space reserved for the signature of the buyer, as follows:

“You, the buyer, may cancel this contract at any time before midnight of the third day after the date of the transaction. See the attached notice of cancellation form for an explanation of this right”.

  • The terms and conditions of payment, including the total of all payments to be made by the buyer, whether to the credit repair company or another person.
  • A full and detailed description of the services to be performed by the credit repair company or service provider for the buyer, including all guarantees and all promises of full or partial refunds, and the estimated date by which the services are to be performed or the estimated length of time for performing the services.
  • And, the address of the credit repair company’s principal place of business and the name and address of its agent in the State authorized to receive service of process.

The contract must have two easily detachable copies of a notice of cancellation. The notice must be in boldfaced type and the following form:

“Notice of Cancellation”

“You may cancel this contract, without any penalty or obligation, within three days after the date the contract is signed.

If you cancel, any payment made by you under this contract will be returned within 10 days after the date of receipt by the seller of your cancellation notice.

To cancel this contract, mail or deliver a signed, dated copy of this cancellation notice, or other written notice to:

(name of the credit repair company) at (address of the credit repair company) (place of business) not later than midnight (date)

I hereby cancel this transaction.”

………………………… ………………………………….

(date) (buyer’s signature)


The credit repair service provider shall give the buyer a copy of the completed contract and all other documents the credit repair company requires the buyer to sign at the time they are signed.


What is the Surety Bond for Credit Repair Business in Illinois?


A credit repair service provider is required to obtain a surety bond under the following procedures shall be applicable:

  • If a bond is obtained, a copy of it shall be filed with the Office of the Secretary of State.
  • The required bond shall be in favor of the State of Illinois for the benefit of any person who is damaged by any violation of this Act. The bond shall also be in favor of any person damaged by such practices. Any person claiming against the bond for a violation of this Act may maintain an action at law against the credit services provider and the surety. The surety shall be liable only for actual damages and not the punitive damages permitted under Section 11 (Damages) of this Act.
  • The bond shall be in the amount of $100,000 and shall be maintained for 2 years after the date that the credit repair company ceases operations.


What are the Damages permitted under the credit laws in Illinois?


Any person injured by a violation of this Act or by the credit services provider’s breach of a contract may bring any action for recovery of actual damages. Such a person may also be awarded punitive damages, reasonable attorney’s fees, and court costs.


**Disclaimer: We made every effort to provide accurate information about credit repair law in Illinois. However, rules and regulations may change anytime. We strongly advised you to do more research or ask legal professionals to learn more about the law.**

What you Need to Start a Credit Repair Business in Illinois?

How to Start a Credit Repair Business in Illinois, USA?

  1. Get a registration statement with the Secretary of State.

    The law requires every credit repair business owner to maintain a copy of their registration statement and allow a buyer to inspect the registration statement on request.

  2. Hire a staff to do the admin work and customer support

    It can be challenging to run a credit repair business alone. You will need to talk to many clients, keep a bunch of records, process papers, contact creditors and credit reporting agencies, and so much more. Hiring a few people is helpful to make the business more efficient and handles workload fast.

  3. Get a reliable credit repair software.

    A great way to run a credit repair business smoothly is to invest in powerful credit repair software. It minimizes workloads and errors and makes the record-keeping and payment process super easy. 
    There are a lot of credit repair software you can find but not all are the same. I suggest investing in credit repair software that has all you need in one program, just like the Credit Money Machine Premium. It features: a CRM system, invoicing, emailing, instant messenger, charging of cc, marketing campaigns, importing reports, assigning letters, dispute reasons, and types, and many others, which you can access anytime and anywhere.