How to Start a Credit Repair Business

Starting a credit repair business is not tricky when you know what to do. This business can make you financially independent when you put in the necessary hard work and commitment to it. This article was put together in the bid to help you get quality information that will guide you from scratch. You will also get tips on what to do until you get your first client. Hence, worry no more because you have come to the right place to make your dream a reality. Please keep reading for: How to Start a Credit Repair Business.

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Credit Repair Business: What is it?

Credit repair is a big deal because everyone wants to improve their credit score to qualify them for funds. Your credit score shows your history of faithfulness with previous loans. Therefore, a low credit score means that you are not credit worthy. When creditors see that you have a poor credit score, they mark you out as a potential red flag. They will either deny you access to credit or give you little funds.

Thankfully, a poor credit rating is not the end of the world. Some organizations specialize in helping people repair their credit scores to qualify them for more funds. When you venture into credit repair business, you have joined the league of such companies. Hence, a credit repair business is a fully managed service that helps customers to increase their credit score. If you do a fantastic job, you will always have clients because people will always need to enhance their credit rating.

More so, you do not have to get a degree in finance or banking before you can start this business. All you need is to understand the process, and you are good to go! How can you do that? Keep reading.

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The Legalities of How to Start a Credit Repair Business

 

For you to succeed in this career path, you need to be conversant with the business’ legal requirements. You must know the applicable laws to avoid running afoul of them. The rules associated with this business are federal laws and state laws. You have to operate within the confines of federal regulations regardless of the state you work.

Nonetheless, each state has its regulations that you also need to know. For example, some states will now allow you to operate unless you have an exclusive license. Meanwhile, some states do not have this demand. Therefore, you need to know the guidelines of both the federal government and your state to ensure that you are safe from future litigation or prosecution.

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To save you the stress of doing research, you need to know the legal requirements for a smooth-running business:

 

Credit Repair Organizations Act (CROA)

The Credit Repair Organizations Act (CROA) is the most basic set of laws you need to know. It is a federal law that was passed in 1996. In addition, it regulates every credit repair business in the US. It ensures that credit repair companies do not make false claims or take advantage of their clients. The US Federal Trade Commission (FTC) is the body that enforces this law. The FTC can fine, penalize, or even shut down a company that is not in tune with these regulations. You can take your time to read the full text of this act. Nevertheless, the following are the critical points of this law:

• You are not permitted to charge for any service in advance. Therefore, most credit repair companies often first provide a credit report analysis and initial consultation. Then, they demand that the client pay a getting started fee after the work is done. So, you should adopt the same or similar approach.

• You must not mislead your customers at any point about your services. You should not tell them that you offer what you cannot provide to lure them into patronizing your company. This is an illegal practice, and you can be penalized for it if your client reports you.

• You must give your client a written document to sign. Besides, this contract must have a clause that permits your client to annul the contract within three days.

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Licensing and Registration for How to Start a Credit Repair Business

No state in the US has formal licensing requirements. Nonetheless, some states have registration requirements you need to meet. Moreover, states that do not have registration requirements often involve filling out an application to register your organization in that state. You will register it as a Credit Services Organization. Besides, you will have to pay a registration fee.

States like Maryland, Maine, Delaware, California, South Carolina, and others have registration requirements. Hence, if you are operating in any of these places, you should be ready to register your company before you get started. Starting without registration makes your organization an illegal entity until you do the needful. Call your state’s Department of Revenue to get more information about specific registration requirements in the state.

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Bonds

This may not apply in your state, but you are likely required to get a surety bond. This protects your clients from any potential damage from your credit repair company’s decisions. Some states do not require a bond at all while the amount required varies from one state to another. Nonetheless, you need to worry because a surety bond is typically affordable. It is usually within the range of $200 – $300. Hence, it is not something you will be a hindrance to you.

Furthermore, it is not difficult to qualify and get approval for a bond. You simply have to fill out an application and pay the fee once approved. Nevertheless, your application is accepted based on your financial assets, personal credit score, tax liens, your time in business, and the amount of bond. After filling the application, the approval process is swift, and it may be done within 24 hours!

 

Business Credit Repair Software for How to Start a Credit Repair Business

Running a credit repair business demands that you employ every means to be as efficient as possible. One of the best ways to achieve topnotch efficiency in this business is to use software that makes things easier for you. DisputeBee ­and similar software will enable you to optimize efficiency and provide faster and succinct results for your clients. Besides, such software will ensure that you spend less time on redundant activities and manual tasks.

With credible credit repair software, you will be able to work on your clients’ disputes within 5-10 minutes monthly. You will only focus on vital tasks such as creating and sending dispute letters to credit bureaus and keeping your clients informed about their progress. Besides, you will also focus on on boarding new clients and offering an initial consultation. Meanwhile, you will be able to automate the following:

• Importing clients’ credit report
• Tracking clients list with their documents and information
• Recognition of negative items on clients’ credit reports like late payments and bankruptcies
• Generating ready-made dispute letters

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How to Create a Website for Your Credit Repair Business

Your presentation to the public is a crucial part of your success as a credit repair company. Hence, you cannot afford to handle this aspect with levity. Your website tells your prospective clients so much about you. They will judge the potential of the quality of your service through the impression they get from your website. Therefore, make it look friendly, professional, and establish trust in your brand. More so, your website should contain captivating leads, and new client registrations for future follow up.

Find professional looking templates for content management systems in tested and trusted websites. Meanwhile, WordPress is the most straightforward content management system for your website. Hence, ensure that you find a template that works with WordPress to make things convenient for you. Moreover, you need a host for your website. Choose one of the options recommended by WordPress to make things easier for you.

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Setting Up Client Billing and Invoicing

You likely feel getting set up to process credit cards is tricky because of the proliferation of intermediaries involved. Nonetheless, it is not as difficult as it sounds when you know how to go about it. Besides, many credit repair software platforms have built-in customer billing integrations. Hence, your task will be made more accessible when you have top-quality software.

More so, the first thing you need is a payment gateway. This will act as the entity that enables you to receive secure credit card and client information. Besides, it will also help you send it to your merchant account for processing. Apart from a payment gateway, you also need a merchant account. This is the entity that enables you to work directly with the acquiring bank to process every credit card payment. Also, it helps to deposit it directly into your business checking account.

Finally, you need a recurring billing system. This helps you to view, control, and manage all of your billing without stress. It also aids you to automate billing and to invoice your clients monthly. Once your client signs your credit repair contract, they will be able to enter payment information directly from the client portal. This will enable them to start a subscription. Otherwise, you can manually collect payment information from them. They will henceforth be billed per month until they cancel their subscription.

Furthermore, with your credit repair software, you will be able to integrate your client payments and subscriptions into your dashboard directly. For instance, your customer’s billing status will be updated automatically monthly. Hence, you will know when it is now due to contact them for necessary actions.

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How to Get Removals and Deletions for Your Client

This is a core part of your service because this is why your clients are hiring you. They need you to erase inaccurate negative information from their credit report. Therefore, you need to be at the top of your game in this regard. To do this, you need to employ the most effective strategies that will give your clients satisfactory results. It is paramount that you use a method that will bring about the highest rate of deletions for your client.

Moreover, being able to help your client remove inaccurate details from their credit report will make them recommend your service to others. Thankfully, it is not difficult to achieve this. When you get good software, you will have access to a ton of remarkably effective letter templates. The strategies below have helped many credit repairs companies:

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Credit Freeze

Employing this approach will ensure that no one will have access to your client’s credit information. This should be the first thing you should do when you get a new client and have access to their credit report. You can do this by accessing their account at SageStream and LexisNexis. It is essential that you begin with this step to prevent Trans Union, Equifax, and Experian from cross-referencing their data with SageStream and LexisNexis. Therefore, you will be able to get more deletions. This is because these three credit bureaus will not be able to verify your customer’s inquiries or accounts with these other third parties.

 

Removal of Old and Outdated Addresses

Also, remove any old and outdated addresses from their credit report when they sign up to help your clients get more deletions. Moreover, early charge off and collection amounts are sometimes tied to these old addresses. Therefore, you will make it harder for these accounts to be verified when you remove them from your clients’ credit reports.

Furthermore, credit bureaus use an electronic verification system called E-Oscar. This system will activate automatic deletions once your client’s credit report does not tally with the account information the collection agency has.

 

Disputing Charge off accounts and Collections

Collections and charge offs will drastically affect your clients’ credit score. So, being able to remove them will boost your clients’ credit rating. By disputing these items, you can achieve this by leveraging laws such as the Fair Credit Reporting Act (FCRA). Moreover, sections 609 and 611 of this act provide the information credit reporting agencies have to provide upon request. Besides, these sections stipulate your privileges regarding demanding an investigation. Once you can prove that any information on your credit report is wrong or unverifiable, it has to be removed or corrected.

 

Disputing Inquiries

To dispute inquiries for your customers, you need to prove identity theft, disprove a factual record of access, or prove a lack of permissible purpose. More so, in section 604 of the FCRA, you will find what constitutes lawful purpose. The allowable use is what stipulates the conditions for allows certain entities to access consumer credit reports.

 

On boarding Your First Customer

The feeling of getting your first client is satisfying and exciting. You will feel that you have begun a journey destined to be productive for a long time. You will get the chance to run through the entire client life cycle from beginning to end. Typically, your meeting with your first customer will follow the timeline below:

 

• Consultation

In this stage, you will review your client’s credit report to determine whether he or she will be worth your time. This involves recognizing negative information on the client’s report. You will also use this opportunity to identify items that may be unverifiable or inaccurate. Usually, credit repair companies often keep the initial consultation short, as it is often free. Make your client aware of the kinds of information you will be disputing for them. This will help them know what to expect from you.

 

• Signing of Contract

Once your client is satisfied with the initial consultation, you should have him or her sign your credit repair contract. Ensure that this document is in line with the regulations of the Credit Repair Organization Act. Besides, the client has to sign it before you start offering your services to him or her.

 

• First work fee

You must not charge a client before offering them your service because it is against the CROA. Your work fee should be stipulated in your contract. It covers items such as initial document processing. After providing your service to the client, you are free to collect your first work fee.

 

• Monthly Dispute Cycle

After the first work fee, you will continue to dispute the wrong negative items on your client’s credit report monthly. This will go on until the client decides to cancel the subscription.

 

 

The Attitudes of Successful Credit Repair Business Owners

The last aspect we will cover in this article is the attitude you need to incorporate to succeed in this business. Information is not enough to reach the pinnacle of your career; you also need the right mindset. The following attitudes will propel you to the top of the ladder in your credit repair business:

 

Make Credit Repair your Full-Time Job With How to Start a Credit Repair Business

Indeed, there are many credit repairs companies. Hence, you must always put that fact into consideration in your decision-making. To distinguish yourself among the rest, you need to give it your best. Therefore, you need to be fully committed to this job to be the best among your peers. You may do credit repair once or twice a week. Nonetheless, such an approach will only make you average, and no client wants to trust a mediocre credit repair company. Hence, if it matters to you to build a sustainable and profitable credit repair company, you should commit to it full time.

 

Have a Business Plan

Just like in any other business, you need a plan to succeed as a credit repair company. You need to create a map to success featuring measurable growth and actionable strategies. You should set the financial and marketing goals you want to achieve within a time frame. It is not proper to have a trial and error approach to business. Of course, there are lessons you will learn on the job.

Nonetheless, it is always better to set out with a definite plan. Some lessons come with a significant loss. Hence, it is better to be equipped from the onset.

 

Know your Niche

You must know your target market before you set out. Moreover, you need to know the clients that will need your services so that you can plan for them. From your analysis of your prospective clients, you will be able to identify your best marketing and operational strategies to cater to their needs. For example, you may focus more on people who have been turned down for mortgages by creditors for low credit scores. Typically, such clients have a credit rating is less than 540. This will enable you to streamline prospective clients for maximum efficiency. It is an utter waste of time to meet clients that you cannot help achieving their objectives.

 

Never Stop Learning

One of the virtues you must never lose as an entrepreneur is the culture of learning. Never forget that you are the business. In other words, the quality of your services depends on your ability to help your clients solve their problems. Meanwhile, you cannot give what you do not have. Hence, you need to keep improving to be able to meet the needs of your clients. You need to make your clients confident in your ability.

Nonetheless, confidence comes with knowledge. Do not ever let your clients feel that they can do what you are doing. Hence, you must always challenge yourself to raise the bar.

 

Conclusion of How to Start a Credit Repair Business

Starting a business in the 21st century is more comfortable because there is adequate information to get started. However, you need to need to search for the right place to get the information you need. Now that you have the knowledge you need to start your credit repair business do not let anything stop you. It is okay to be a little anxious because you are chasing your dreams. However, do not let anxiety or fear stop you. You have got all it takes to be among the best in the world.

 

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