Fraud Blocker Credit Repair Laws in New York & Credit Repair Business Potential
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Credit Repair Laws in New York

by | Sep 29, 2023

As one of the richest states in the USA, New York is a good place for business. But is it really for credit repair business? Let’s explore the strict credit repair laws in New York and learn the true potential of this business in the state.

New York’s Credit Health and Economic Overview

If you are planning or have started a credit repair business in New York, it’s important to know what I’m about to share.

New York is one of the country’s most economically powerful states, and its credit health reflects this. Home to 19.46 million people, New York boasts a median credit score of 719. Its homeownership rate is one of the highest in the country, putting the average mortgage debt close to $271,284. 

For its non-mortgage debts, the average credit card debt in New York is $6,269. Its average auto loan debt is around $25,564. Finally, NY’s average student loan debt is approximately $38,139, representing a debt load above the national average of $37,338.

New York's Average Credit

Poverty Rate and Delinquency Rate in New York

According to World Population Review’s 2023 poverty rate update, the poverty rate in New York currently sits at around 13.24%. This rate is higher than other rich states like Texas‘ 13.06%. California‘s 12.47%. Florida‘s 12.24%. And New Jersey’s 9.1%. 

Additionally, New York has a high credit delinquency rate, according to the New York Fed report. Particularly the state’s credit card delinquencies, which hit 7.2%. And auto loan debt delinquencies, which increased to 7.3%. Both in the second quarter of 2023.

Is it Good to Start a Credit Repair Business in New York?

With New York’s population, high delinquency rates, and credit health, many people would benefit from credit repair services.

Dealing with a bad credit rating is horrible, and people often seek credit repair services for help. Unfortunately, some credit repair companies exploit people who lack knowledge about repairing credit. Therefore, the legislature has enacted strict Credit Repair Laws in New York to protect consumers from fraud and scams.

Understanding Credit Repair Laws in New York

Compared to many other states, New York’s regulation of credit repair services is among the strongest in the nation. The state has amended the general credit repair laws to protect its consumers further. This includes an increase in the civil penalty for violations of the law from a maximum of $1,000 per violation to a maximum of $2,500 per violation.

Surety Bond Requirement in New York

Additionally, the state requires all credit repair businesses to secure a $25,000 surety bond. This amount is higher than in other states. In Florida, for example, the bond requirement is only $10,000. Meanwhile, Arizona requires only 5% of the service fees charged by the credit repair businesses. However, it should not be less than $5,000 or more than $25,000. 

Other states require a surety bond of $1,000 to $100,000. 

Prohibited Acts under Credit Repair Laws New York

Under Credit Repair Laws New York, the following acts are strictly prohibited:

  • Making false or misleading statements about a consumer’s creditworthiness, credit history, or the effects of credit repair.
  • Engaging in any unfair or deceptive practices. This prohibition includes taking advantage of consumers’ lack of knowledge or understanding of credit repair.
  • Charging upfront fees before the completeness of the services. Credit repair companies must provide the consumer’s credit report demonstrating that the promised results have been achieved.
  • Making guarantees regarding the outcome of credit repair services. This includes promising a specific increase in a consumer’s credit score.
  • Encourage consumers to provide false information or engage in fraudulent activities to improve their credit.
  • Perform services without providing consumers with a written contract outlining the terms and conditions of the services offered.
  • Not providing a Notice of Cancellation and informing the consumers about their right to cancel within three business days after signing.
  • Failing to provide the promised credit repair services after receiving payment.
  • Operating as a credit repair company without the required licenses or registrations.

Read this article about how to avoid credit repair fraud.

**Disclaimer: While we strive to provide accurate information on New York’s credit repair laws, please note that government laws are subject to change. Therefore, we recommend researching for further information or consulting a lawyer about credit repair services law.**

Frequently Asked Questions


Q1: What is New York’s surety bond requirement for credit repair services?

A1: The state of New York requires $25,000 surety bond for credit repair services.


Q2: Is credit repair business legal in New York?

A1: Yes. Credit repair business is legal in New York with the protection of credit repair laws.


Q3: How much is the penalty for credit repair violation in New York?

A3: The state of New York’s civil penalty per credit repair violation depends on the violations but it should not be more than $2,500 per violation.



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If you are just starting a credit repair business, we have a comprehensive guide on how to start a credit repair business.

Read Credit Repair Laws in All States or navigate the map to read credit repair laws in other states.