Everything You Wanted to Know About Launching Your Credit Repair Business - Corey Gray (Part 1)

Hey, Credit Heroes. I wanted to do something really special today. Everyone who is starting a credit repair business, they always have a million questions. So I sat down with Corey Gray, who is our resident expert and authority on credit repair here at Credit Repair Cloud, and we answered every single question that every new Credit repair business owner wanted to know. We talked about disputes, running your business, dealing with bankruptcies, getting clients, getting paid. If you are in the credit repair business or just getting started and you have burning, burning questions, well then listen up because we are gonna answer them right now. So the big question is this. How can we take our passion for helping people with their credit and turn it into a successful business without taking loans, without spending a fortune by bootstrapping it from nothing so we can help the most and still become highly profitable? That is the question and this podcast will give you the answer. My name is Daniel Rosen and welcome to Credit Repair Business Secrets. Hey, what's up Credit Heroes?

What's up Credit Heroes? Calling all credit Heroes.

Hey Credit Heroes. Daniel here. I'm at Credit Repair Cloud headquarters. I know lots of you guys are joining. I'm going to give you guys a few minutes. This is a really, really exciting day here. We are here with Corey Gray over here. Corey, you might know he's been in the community for a few months, but it's time we really, really introduce him to you because he's kind of a big deal. He's been in the credit repair business for over 20 years and just like you, he and me, he started a business from absolutely nothing and then he grew it very, very, very large and then he sold it and then he wondered what to do next. And I said, come over here to Credit Repair Cloud so you can be our in house credit expert and help everyone. So now he's helping people every day on Facebook and building these amazing courses on disputing and those are going to be launching very soon. We're going to announ very soon. And finally, here's what I'm really excited about. Finally we have someone at Credit Repair Cloud whose goal every day is to just wake up every morning and just help you. He can answer your questions. He's going to help you to be better and better at the dispute process and we're really, really thrilled. So Corey, welcome.

Thank you, Daniel. Appreciate the warm introduction. I'm thrilled to be here. Love the company, love all of you guys. Want to help you any way I possibly can and I think this Q and A session is a great way to start.

Yeah, it's going to be Fun. But I want to know before we get into all of this, 20 years ago, very few people were doing credit repair. I mean, you, you really were a pioneer. What got you into this? What got you into credit repair?

So my story really didn't start like a lot of the others. A lot of people had traumatic injuries to their credit. Mine didn't start that way. I actually worked for a debt consolidation company, consumer credit counseling company, back in the late 90s. 98 actually. 97. 98, 99. And while I was there, we were helping people consolidate their debt and basically get them out of debt in a shorter period of time than if they were doing it on their own. And although we were helping people, the one place we really weren't helping them at all was with their credit. So when we were finished with them, they had traumatic credit problems. So I just saw a huge demand for it and I started up shop. I started a very, very low key, very small business and you know, I built it and built it and built it and eventually it became a, you know, a juggernaut. So that's basically how I get started, if that answers your question, Daniel.

But you really did do it from nothing, right?

I did. There really weren't any resources. Credit repair cloud wasn't around. I do vaguely remember seeing credit aid popping up with, with Daniel, you know, but no, there were a few different softwares out there, but you really had to learn the ropes all on your own. It wasn't just like a blueprint where you can follow these steps. So there was a lot of trials and tribulations between the steps and a lot of mistakes that were made. I did a whole bunch of failing.

But there was no credit repair cloud community. You could log in and just ask your question and have all the experts answer it.

No, there really wasn't anybody out there. You know, it was a long, hard road, but I think that the harder it is for you to accomplish something, the better it'll be for you because without those slip ups and those fails and those falls, you really just don't learn anything. So, yeah, I'm grateful that it was as difficult as it was.

Yeah, I mean, it's not easy starting a business from nothing with zero budget, but you've done it and you grew something very large. I've done it and now we can help others to do the same thing. And that's what is really, really cool.

That's gospel. Absolutely.

We have a whole bunch of questions. We posted that we're going to be doing this QA session Live. And a bunch of people wrote amazing questions. So the way this is going to work is I'm going to go through and I'm going to read off the question. And then depending if it's about. Actually we're just going to alternate. If it's more about the credit disputing, it'll be Corey. But we'll just sort of jump at this and, and see how it goes. So.

Sounds good.

I mean, they're really great questions and thanks, you guys for writing them in. And by the way, Keenan is here. Here, say hi, Keenan.

Hey, what's up, Keenan.

Keenan's over there with my Cloudy pillows. Anyways, Keenan is also going to let us know if you guys are. Are listening and you have questions that you want to ask. You can just type them in and Keenan will hopefully see them and relay them to us. But I'm going to start with these questions that we already have on the page. Okay, Are you ready, Corey?

I'm ready. Let's do this.

Okay, so the very first question comes from Alex, Alex Marquez, and he asks, when disputing, how do we know whether to dispute with credit bureaus, creditors or collections? Is it based on questions that you ask the client or is it not possible to dispute just with the credit bureaus?

That's a great question, Alex. So really, you always want to revert back to this key thing here. You want to make sure that you're always starting out with round one with the bureaus. Okay. That's really the. The first thing you want to do is go directly to the bureaus. Now, you could start out with a verification, meaning you're asking them to verify it. Or you can dispute something specific that you feel is factually incorrect. But the reasons and the instructions really are based on what the client tells you. So if the client tells you that this information, this account, is wrong because it's the wrong status date or it's the wrong balance or whatever is factually wrong with that, you can dispute that on that, on that fact, on that factual basis. However, most clients don't give you that feedback. A lot of clients are coming at you and they're asking you to remove something. And if you don't have an actual reason to dispute it, then you can always rely on just basically saying that it's questionable, meaning that you are asking the bureau to go ahead and investigate it and verify it. You're putting the burden of proof on the credit bureau. So to answer your question, you really don't need to worry about who you're Sending it to just always start out with round one and if you have a factual reason to dispute it, go ahead and use that reason. If you don't, then go ahead and just dispute it as questionable.

And round one always goes to the bureaus.

That's correct. Always. Every time.

Yes. So then you just see how they. What comes back from them. Well, that was a really good question. And good job, Corey.

Thank you. Thank you. Excellent question.

Let's go on to the next one. This is from Margaret Kindle and she says I'm kind of lost. Questions about everything. A big frowny face. Started on a practice account from a possible affiliate, but it's 166 pages long and it's my first one. Questions about that as far as disputes go. Also having software issues, trying to get email set up. Also moving along slowly getting legally set up. Questions about that too. I'm not sure where to start. So this is a whole lot of stuff.

I got it.

Why don't we start with that 166 page report, man.

So, Margaret, first of all, I've seen thousands of credit reports. I've never seen one 166 pages long. That's pretty, pretty crazy. Yeah. I mean, 166 pages. Okay. So he must have a lot of negative information or she. Okay. Either way, regardless of how long the credit report is or what you see on the credit report, just like we just talked to Alex, you want to start with round one and you want to make sure that you're disputing five items or so. Roughly five items. We will talk about this a little bit later. I saw another question about that. But for now, you know, just start out with the first five items and go after it. As far as the soft. The software issues that you're having, that's going to be a support at Credit Repair Cloud issue. But it may be. Daniel can elaborate on that.

Let me jump in there. I don't know what software issue you're having, but we want to help you. I don't know if it was a software. You mentioned software and email issues. So you can write to our support team, whether it's about Credit repair cloud or if it's about your web hosting and your, your email. If you're with my credit repair site, just write to supportitrepaircloud.com tell them what issue you're having, what's going wrong and they'll help you. They'll help you. They usually respond within an hour. We've hired so many support people, so just reach out to them. Okay. And they will assist you with whatever issue you're having. We'll get you rolling smoothly.

That's right. I mean, all of our agents, they wake up every morning wondering how can we make our credit repair cloud users lives easier. So whenever you have a problem, just make sure you reach out to them. So you had a second part of this question. So you were talking about how do you get set up legally? And you weren't really clear on what that meant. But I guess my question would be to you would be what have you done so far? Because you know, there's a lot of different parts on getting set up. And what I mean by that is, you know, when you get started, you want to make sure you have your entity set up, meaning whether you have an LLC or a corporation or a sole proprietor. And you know, I'm not an attorney, I'm not really here to give you any advice as far as, you know, legal or tax ramifications, but you want to make sure you get that set up first. And then.

Can I jump in?

Yeah.

People ask us all the time, what kind of corporation should I be or should I be an llc? And why. This is really between you and your tax preparer or your accountant or your cpa. Whoever you go to for your taxes, you'll want to ask them because they're the expert. Okay. They're going to know what's going to save you the most money and what's going to be more beneficial and, and, and what's going to save your butt 100%.

So once you've got that done, you want to just register with the irs, get your EIN number, and then once you have that, you know, you can go ahead and open a business bank account. You can obviously start to start to make sure that you're doing everything properly. And one of those things is to make sure you check out your state requirements. We do have a really great page if you just do a quick Google search. Credit repair, cloud, state laws. There's a lot of information on what you need to do to make sure that you're compliant. And every state is different. We don't, you know, we really can't keep up with making sure that every little, every little part of, you know, what you're doing to set up your business is correct. You know, you can always advise an attorney. But there are a couple of things that you want to make sure of, and one of them is make sure that you're, you're registered as a credit service organization in your state and Each state is different. I did. I did submit a sheet to the Facebook community the other day. I think it was CSO compliance. If you check that out, there's a line by line, state by state, exactly what you need to do. And if you just go to that sheet and if you land on something and you just don't know exactly what to do, just hit me up on Facebook and I'll make sure that I help you out.

So. And you uploaded that here in the community, right?

I did, yeah.

So I don't. A lot of people don't realize this, but there is some amazing, amazing stuff here in our community. It might be harder to see if you're logging in on a phone, but if you're on a computer, you click the button that says files, and you'll see, like, miles and miles of amazing scripts and documents and laws and all kinds of really, really useful stuff. So if you have not been to the files section, I recommend that you click on files after you're done watching us, because you'll just find a bonanza of crazy, cool stuff in there. Can you post a link down below about the link to the state laws? Because that'd be really helpful for people, too.

Okay, yeah, That's a great resource, Daniel. Also, if you just go to the search box and then search whatever you're looking for, like, if you type in CSO requirements in the search box, it's gonna pop right up, so.

Absolutely.

I hope that answered your question, Margaret.

Yeah, I hope that did, too. Let's go on to the next question. It is from Ron Friend. I like that name. Okay, Ron. Ron asks, what are the best places to advertise a credit repair business locally? To get the best response, is there a particular area to focus on? And I'd say this is. This ball's in your court, Corey.

Yeah, I mean, this is just straight marketing. And I mean, I guess you just really need to be creative and explore all the different places that you can market to. So we did just about everything. I mean, starting out, there was no stone I left unturned. There were so many different places that I went out and just did every type of guerrilla. Guerrilla marketing you can think of. And when I say guerrilla, I mean really low budget. Like, anything I can do to just drum up business. One of the things that I did, which I don't know if I would really recommend it, but I bought those political yard signs. You know, the ones that they place in the yard, you stick them in the ground. Well, instead of sticking them in the Ground I had a, I had an H1. It was a military Hummer edition vehicle. And what I did was I put an A frame ladder on top of it and I'd climb up the ladder and I would nail them in with the fat head nails as high as I could into the telephone poles. We would go on road trips and just nail them up. And the problem was, was the good thing was, was nobody could get them down. But the problem was, was code enforcement. So you can't really get in trouble unless they see you doing it. But one day I did get caught doing it and the guy literally wanted to, wanted to kill me. He said that he trying to pull these things out of the, out of the telephone poles. But there's a million different ways you can go about it. I mean, we did barbecues, we bought this big smoker and we would set it up on the side of the road in Palm beach county and we would just have a big sign that said free hot dogs or free hamburgers. And we would cook hot dogs and hamburgers and we would hand them out to people and just strike up conversations and talk about credit repair. And we got a lot of business that way. We did a lot of meetups. You know, there's meetup.com you can start your own meetup or you can join other meetups. You talk to like minded people, you gotta network, you gotta talk to people. There's a lot of different things you could do. I mean, you could do direct marketing where you're mailing out mailers to specific neighborhoods in your area. It really just depends on what you want to do. These days. There's, you know, when I say these days this is like, you know, four or five years out from where I was. And technology really has changed and improved. And these days, I mean, you can geotarget on Facebook to your specific area. And I'm saying this because you said local. And Ron, if you're trying to hit the local area, you got to mingle with the locals, you got to talk to them, you got to deal with them, you got to figure out what they want and create relationships with them. But I mean, I really think that what you really want to do is just make sure you reach as many people as you can and build relationships. So not sure if that answers your question. Totally, but that's what I did.

But I want to jump in on that. Besides throwing barbecues and all that, that's amazing. And you should hit the streets and like in Pulp Fiction where the guy says he just wants to go walk the earth. You should just go walk and meet every mortgage broker, realtor person who installs solar and just shake their hand and tell them if they work with you, they're going to sell more houses, they're going to sell more solar. It's a win win for everyone. And that doesn't cost anything. But the best advertising if you're just starting your business is word of mouth. Start by help. Yeah. Be a credit hero and start by helping friends and family and really over deliver and then get testimonials from them and then you can have them be your first affiliates. And it really is just generating that word of mouth by being awesome and then. Yeah, that's gonna really catch fire. And that's. You could do that for free.

Yep, I agree.

During a credit repair cloud free trial even.

That's right.

So there you go, Ron. Okay, let's go on to the. Oh, Ron has another question here.

He's got like four or five questions.

Oh, wow. Okay, cool. Ron asks, is it possible for. Oh, this is one for me. Is it possible for the client to pay for services from inside the client portal once everything has been set up? And Ron. No, no, that's not possible. And I'll. But I'll tell you why. You wouldn't want someone to have portal access unless they are already a client. Okay. So everything in CRC has a flow. So here's what I recommend. You can have them sign up and pay on your website if you use our web lead form. And if you're using chargebee, you can put chargebee plans in there. But to be honest with you, if you're leaving it up to the client to sign themselves up, you're going to get a lot fewer signups. Okay. The better thing to do is to hold their hand through the whole thing. So what you can do, instead of worrying about the portal just yet, just load the potential client into the software. Okay. Then you import their report and do Simple Audit, which you can do when a client is just a lead. Okay. And then when you have the Simple Audit report, it is so cool. I don't know if you've run Simple Audit, but it's like when you take your car to the dealership and then you get that long readout of all the ways that dealership can help you with your car and it gives value. And you learn about your car. And it's the same thing with the Simple Audit. Yeah. The client really learns about their credit. They learn how you can help them, they learn things they can do. To speed up the process and do things on their own. But it really gives value. It gives massive value. And it explains what it is that you do as a credit repair expert. And it's designed to really lead that sale. Okay. To close that sale. So if you just go through the simple audit report with that client that's going to close the sale, and then at that point, all you need to do is complete their client profile and ask them for their credit card details and type them in. Okay. If you're asking for them and you're typing it in, you know it's going to happen rather than leaving it up to them. Okay. So, so hold their hand, do the simple audit, wow them, then ask them for credit card details entered into credit repair cloud. Choose which agreement you want and have, have those set up first. And, and if you're using charge B, you choose which charge B plan and, and then you click to submit and add them as a client and boom, everything's all set up. For the charging to their card. They get sent a login, they log in, they sign your agreement, and they can do this all on their mobile phone. And then they're guided through the onboarding where they take pictures of their photo ID and proof of address and choose a signature font that gets inserted in the letters and all that. So that's the flow. Okay, I hope that makes sense. And then, and then they're off and running. Okay, let's go. Wow, he does have a lot of questions.

Made perfect sense. Thanks, Daniel.

Yeah, sure. So do you know of any online attorneys that prepare per state client service agreements for credit repair? So we both know the same guy.

Same, same guy. So he may not be an online attorney, but I would recommend that you contact Robby Birnbaum. He helped me out of a couple of tight jams. He's really the biggest and best credit repair attorney out there. So if you want his phone number, his direct line is 954-343-6959. You can also email him. It's robbie.birnbaumlaw.com he's just a great resource. I mean, most, most credit repair companies keep him on retainer just to make sure that anytime they have a question, they can help him out. But you know, if you need some help with, with an agreement, just feel free to reach out to him and at the very least, he'll give you his direct opinion on what you need. He's very, very, very much a straight shooter.

Really nice guy. He came and spoke at Credit repair Expo. He was on Stage for what, an hour? Keenan? I think it was an hour. And he, he just like, he's just a walking encyclopedia of the law and just brilliant. I'm. We're going to be doing some interviews with him on my upcoming podcast. I love Robby Birnbaum. In fact, if you can't remember the number or his email address, if you just search Robby, R, O B B Y Birnbaum, B I R, N B A, U M, you'll see him listed everywhere.

I'll post it on Facebook after, after this is over. Cool.

I'd say he, he probably handles more credit repair businesses than any, any other attorney in the country.

Yeah, he's the go to guy. He's, he's definitely the go to guy.

He's also affiliated with naxo, I believe.

He'S the president of naxo.

There you go. And that's an organization that also advocates for credit repair companies with the government. They do lobbying and stuff.

That's right.

Yeah. Yeah. So he's fighting for your rights. Okay, next question. What types of business insurances are recommended for a credit repair company? Great question.

That's an awesome question. So I never, I never subscribed or paid for these types of insurances and I actually learned this from Robby. You should have EO insurance, which is errors and omission. So this is basically to make sure if you ever make a mistake, if you cause a problem for a client that you know is going to cover that. And then there's also D and O, which is directors and officers insurance. It's basically marketing insurance. So if you send out flyers and you say, hey, we guarantee a 50 point increase in your credit score, the FTC or the state AG or the CFPB or some other agency somewhere, it'll probably catch their attention and they're probably going to come after you. And if they do, this covers your ass. So you know, if you're talking acronyms, it's E L for Air emissions and DNO for Directors and Officers Insurance. So you know, for me, I mean, I tend to be more by a fly, you know, fly by your seat. I'm a little bit more risky. Like I didn't even get bonded in any other states other than Florida for the first like five years. I was in business even though I was doing business in all 50. But eventually it caught up to me and I probably should have been a little bit more careful with what I did as far as making sure I was doing everything by the letter of the law. But for insurance if you really want to be careful, you want to. Really want to make sure that you're doing the right thing and you're protected, get the E and O and D O insurance.

Yes. And by the way, disclaimer here. This. Corey and I, we are not attorneys. Do not take this as legal advice. Go. You should. If you're starting a business, you should invest in meeting with an attorney, because that's what they do. Okay? But we're going to help you start a credit repair business and be very, very successful at it. But cover your ass.

Good call.

Good call. Yeah. Okay. Another question. Can't. And this is still from Ron. Okay, these are great questions, Ron. Okay. His question is, can the original creditor and the collection agency that purchased the debt report the same account to the bureaus, or would this be considered double reporting or double enrichment?

This is such a common question and it causes so much confusion. So you would think that, okay, you have a credit card with Capital One, and then Capital One, you know, for one reason or another, you stop paying, they charge it off, it goes to collections, and then the collection agency comes along and reports it as a collection. Doesn't really sound fair. You have Capital One reporting it. Then you've got ABC Collection Company reporting it. Well, the truth is, it actually is legitimate. It actually is correct because the original creditor and the collection agency are both reporting accurate information. I mean, this is. This is your credit history. Now, the original creditor can't keep reporting a balance after the collection agency reports a balance, but they can report that it was charged off and sold to a third party. So now you have Capital One reporting that it was charged off and it was sold to a collection agency with the zero balance. And then you have ABC Collection Agency reporting, you know, a $1,200 balance for a Capital One account. That is actually truly your credit history. That's accurate. So to answer your question, yes, they can continue reporting that, but to. To go a little bit deeper on that, that doesn't mean that you have to live with it. You can use the letters in our library to dispute it with the original creditor and the collection agency and hopefully get it removed.

Cool.

So hopefully that answers your question.

Sounds good. Okay, now we have a question from Star Bose. And Star asks what would be considered proof of the debt. Is a simple bill enough?

That's a good question, Starr. So under the fdcpa, if you're disputing a debt, meaning if you're demanding validation on a debt, the bar is pretty low. Okay, the amount the creditor, excuse me, the third party debt collection agency is required to only produce the amount of debt, what the debt was for, and the address of the original creditor. So there's not very much that they need to prove it. Now, if you look at this from a different perspective, if you look at it as, hey, I'm being sued for a debt that's not mine, and you demand validation from a creditor, from a third party debt collector, and they only say, yeah, you owe $50,000 and it was with Capital One and it was for a credit card, that really doesn't prove it because validation is there to prove that the debt is indeed valid. That's the term, validation. So if you go to court and you show the judge, hey, look, I asked for validation of this account and Capital One said, yeah, you owe $50,000, here's their address, and it was for a credit card, that doesn't necessarily mean that I am liable for that debt. So in short, the FDCPA does set a very low bar to prove the debt is valid. But at the same time, if it ever gets into a courtroom, usually the judge is going to have enough common sense to know that, hey, if this debt is not truly this client's debt or this consumer's debt, then it may not be effectuated into a judgment. So I don't know if I'm going too deep on that subject, but to answer your question, to prove a debt, the bar is very low.

Cool. Hey, we have a comment here. I can't see who it's from, but it relates to the last question. What happens if you are not bonded and you get caught?

I can tell you from personal experience, it's not a fun experience. Robbie makes it. Robbie Birnbaum, my attorney, made it seem as if it was really not a big deal. And he made it not a big deal and he fixed it with no problem. But it's really stressful. I mean, if you have a federal regulator, whether it's a state AG or the FTC or the CFPB coming down on you, I mean, the fines that they can impose are huge. So you know what happens? What happened to me was they asked, it was in the state of Indiana and they wanted to know every single client that I've ever done business with in the state of Indiana. They wanted a contract to make sure that it's CROA compliant and they wanted to see the billing history and they wanted to see all the letters that I had sent to every client in the state of Indiana. So they're very specific. They just want to know about what's going on with the customers that you dealt with in the state of Indiana. So usually, frankly, it's a shakedown. That's what the state AGs want. They want money, they want to, you know, they want to fund their coffers and they want to collect as much money as they possibly can. Just to elaborate on that a little bit, what, what I did for, for years and years and years before I really got serious was I was only bonded in the state that I, that I, that I was in. Now the thing that you want to think of is when a state AG or the FTC or anybody comes down on you, they're going to be looking at the consumers in their state. That's really all they care about. Well, the ftc, the state AG and the cfpb, or excuse me, the FTC and the state and the CFPB are federal, but the state AGs, they care about the consumers in their, in their state. So what you can do to just really make sure that that doesn't happen to you and if it does, you're protected, is number one, you should really have a bond in the states that you're doing business in. I, personally, I ended up fighting it based on interstate commerce laws because like, let's say you're in Florida and You only have 200 clients in Indiana. It's not really fair that you have to pay for a bond and a license and CSO registration in Indiana if 90% of your clients are in Florida. But the state AGs don't really look at it that way. So what you, what you should do is, number one, make sure your contract is just really solid. It's not, you know, it's transparent. You're not deceiving anybody. You're not, you're not saying anything that's, that's deceptive. That's gonna, that, that's gonna mislead any consumers. And number two, make sure you're doing the work that you say you're going to do. Make sure you're following CRO. Don't, don't actually charge for the work until you do it, because that's what they require. And other than that, I mean, if you just treat Your clients good 99.999% of the time, you're not going to get any complaints. You know, as long as you're doing the right work, you're doing what's right for them and you're setting the right expectations, you're not telling them, hey, I can get you 100 point increase or hey, you know, I'm going to get you into a house in the next six months. You just be real and honest with people. If you set the right expectations, you're really not going to have a problem. And honestly, I don't even remember what the question was. You just asked me. I was going in all different directions.

But basically I want to jump in again. Don't take any of this as legal advice. The law actually says you have to if another state, if you're working, if you have clients in different states, you're supposed to have a bond if it's required in those states. Some states don't require a bond at all. Some people freak out and see the giant cost of a bond and don't realize you're only paying for a small portion of that. And then also if you're just starting your business, there's a lot of people in your state, so you don't even need to worry about other states. That's just noise. Don't worry about that until you're ready to grow to other states. Just concentrate locally. And then when you have so many clients from your own state and you're ready to go to other states, then look at what you need to do for those states. That's all I wanted to jump in.

Well said. Absolutely.

Yeah, but none of this, I mean, it's building a business. Just worry about what's in front of you today. You know, so many people worry about a million different things and you just want to keep it simple and keep moving forward and every day grow it. Hey, here's a good question I want to ask again. I can't see in this software who's asking the question, but it's a really, really good question. The question is, what's the difference between a charge off and a collection? And why do they sometimes appear at the same time?

A charge off and a collection. So a charge off is when a company essentially no longer feels that the debt is collectible. It's typically around 120, 180 days. They're going to basically consider it a charge off. So they no longer have to consider the debt as an asset. So companies consider every debt that they owe that they own an asset for their company. Therefore they pay taxes on those debts. So when they charge it off, they're eliminating their tax liability. And by doing that, they no longer have to pay taxes on that debt as an asset for the company. So the difference between a collection and a charge off is with a Collection, they're still attempting to collect the debt with a charge off. They're no longer claiming that debt as an asset for the company. So what was the second part of the question?

What's the difference between a charge off and a collection? And why do they sometimes appear at the same time?

So, okay, let me give you a hypothetical. Let's say that you and I'm just going to use the same company just for, you know, whatever reason. So let's say that you owe a hundred dollar debt to Capital One. Capital One gives you a credit card, you stop paying it, right. And then after about 90 to 120 days, they're going to basically give up hope that you're going to pay it. So they're going to charge the debt off. And again, that's charging the debt off. So they no longer consider that debt an asset for their company and they no longer have to pay taxes on it when they do that. You know, at that point they really don't have a method to collect that debt. So what they're going to do is they're either going to sell or lease that debt off to a third, third party debt collection agency. It might be they might lease it or they might sell it. Either way, a third party is going to come in and they're going to attempt to collect that debt. So you're going to start getting collection notices, dunning phone calls, you might get emails. Who knows, they're going to do whatever they can to try to collect that debt. And now at that point, it's a collection. And again, that same question, I think it was Ron asked that question earlier. You have the original creditor, Capital one is showing $100 charge off account. And then all of a sudden you have ABC Collection Company reporting it as a $120 collection account. Well, that's because that's the history of the account and that's really what credit reporting is all about. It's about your history as a consumer and the debts that you owe. So Capital One is going to, is going to sell it off to the collection agency. You're going to see Capital One and then you're going to see the collection agency.

Well said.

Thank you.

Okay, I hope you enjoyed this QA session with Corey. We are going to stop right now and we're going to pick this up again on the next episode where we are going to answer the rest of the burning, burning questions. In the meantime, I hope you're finding value in this podcast. My whole goal here is to help you to be more successful with your credit repair business. So if that sounds good to you, then please click below to subscribe because I don't want you to miss any episodes and I would love to know how I'm doing. So if you have any feedback, please leave it below in the comments. I would love to know what you think and I will see you on the next episode. And until then, keep changing lives. Hey everybody, it's Daniel again, and really quick. I'd like to invite you to join what I believe is the best thing we have ever created inside the credit repair cloud community. And it is a challenge that we call the Credit Hero Challenge. If you're just planning out your business or you're just getting it started and you dream of having a successful business of your own, so you can quit your 9 to 5 and fire your boss and have financial freedom, or so you can add another revenue stream to your existing business, if that's your dream, you need to get into this challenge. We created this challenge to help you to create and launch your very own credit repair business. To build a proper foundation for a really successful business. This challenge is going to help you you to understand the strategy, the tactics and all the things you need to be successful at Credit Repair. It really is the greatest thing we have ever built and it will change your life. So I recommend you do it right now. Stop everything, Pause this audio, go online and go to creditherochallenge.com that's creditherochallenge.com and join the next challenge. And there's a challenge that's starting in just a few days. So go get started right now@creditherochallenge.com.