A contractor's license is something you PURCHASE. You need to have enough cash to pay an insurance premium, and you need to be able to purchase a bond. In Oregon, you also need to pass a few tests after taking some classes. The class topics are things like how to write a contract, OSHA regulations for having employees, how to keep books, stuff like that. And the tests are open book. So, the reality is, you do not need to know which end of a hammer to hit a nail with to become a "licensed contractor". That is the absolute truth.
The one and only thing that hiring a licensed contractor does for you is help protect you if the contractor screws up, or bails on you. That's it. Nothing else.
Therefore, the best thing you can do when hiring a contractor is to try to get a good contractor, with good references, who is NOT going to screw you or leave you hanging with something that isn't done right, or is coming apart. So get references, and actually CONTACT those references. Ask questions about not only the work, but working with the contractor. Did they communicate well, and willingly? Did the customer feel the contractor was straight with them, or shady and evasive? Is it possible to see examples in person of the contractor's work? If so, take the time to do that. If you read reviews, just keep in mind that you are only getting one side of the situation in a review. Look for trends, not a singular incident.
Contractor's boards do a LOT of PR
to convince people that licensed contractors are the only way to go, and while they do not SAY it, they IMPLY that licensed contractors are reliable and competent, while unlicensed contractors are usually 'fly-by-night' operators. All you have to do is go to the contractor's board website and look through all of the claims against all of the licensed contractors to be able to see the lie in that.
I was licensed for 11 years. I am a cabinet maker and furniture maker. The only thing I need a license for is if I attach something to a part of someone's house, such as screw a cabinet to a wall or floor. If I have to do that, and the customer is uncomfortable about it, I have a friend who is a licensed contractor who will come over and put those screws into the wall for me. Then it's totally legal. But the work is still my doing. They are relying on me, on my character, and on references from other people, and they can see a lot of examples of my work on my website. If they want to see some in person, I have customers who are willing to allow that, because they appreciate the quality of the work, and are willing to help me out in that way. It's only happened a handful of times in nearly 30 years, but I appreciate it and the potential customers did, too.
Anyway, sorry if this sounds like a rant, it's a bit of a pet peeve of mine. I got injured many years ago, non-job related, and the results were that I got a medical bill that I could not pay, that gave me black mark on my credit score, which got my bond cancelled, which got my contractor's license cancelled. I could not get bonded again for 10 years, unless I wanted to pay $10,000 for a bond. And I ultimately paid off all my bills in about 2 years,(10k worth) but that did not change my bond status, so I could not renew my license. Thus, I will vehemently protest any claims that only licensed contractors are worth hiring. There, I'm done.