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6 Important Steps To Starting A Credit Repair Business

    Over one-third of all Americans experience credit score trouble, which makes credit repair services a lucrative industry, as people want to improve their financial situation. If you’re thinking about starting a successful credit repair business, you’ll need to understand the market, manage your time and resources well, and create a powerful business plan.

    Getting started is easy, as you don't need huge capital nor to rent an office. You can work from the comfort of your home with a monthly profit ranging between $4,000 to $10,000. However, if you’re serious about starting this type of business, you need to make it a full-time job.

    Continue reading to find out how to set up a credit repair business.

    Credit Repair Business


    Create a Solid Business Plan

    A well-written business plan should outline your company's mission and vision, as well as the detailed strategy you’ll use in order to achieve your goals. A business plan is a must for every company, no matter its size or the industry it operates in. 

    A credit repair business plan should include a few key elements to ensure its success, including a company description, customer analysis, marketing and operations plans, cash flow statements, etc. Business plans come in handy when you’re asking for a loan from banks and investors. For best results, you should update it annually. 

    Follow Credit Repair Laws

    Credit repair laws can be different from one state to another, so you need to consult with a local legal attorney who will explain the laws and requirements in detail. In addition, get familiarized with the Acts that apply to all credit repair companies. 

    CROA (Credit Repair Organizations Act). It is a federal law that regulates credit repair businesses, while also making sure companies don’t take customers' sensitive info to their advantage.

    FCRA (Fair Credit Reporting Act). This is another federal law that was passed to ensure credit reporting agencies properly report their clients' information.

    Even if you have basic law knowledge, before you start your credit repair business, it is important to do extensive research on the local laws and regulations.

    Purchase the Best Credit Repair Software

    Credit repair companies have lots of work. There is a lot of data to keep track of, and a lot of phone calls and letters to send out. It is time-consuming, and that’s where credit repair software comes in handy.

    The software helps you keep track of all the information related to your client's credit reports. This includes their personal information, contact information, and credit history. It also helps you keep track of the progress of your client's credit repair process. This way, you can easily see which clients are making the most progress and which ones need more help.

    Credit repair software allows you to automate some of the tasks associated with credit repair. For example, you can use the software to automatically send out dispute letters to the credit bureaus. This can save you a lot of time and effort, and it can also help you get results faster.

    Credit Card

    Take Training

    A credit repair professional doesn’t necessarily need a degree, but having a certificate is required and highly appreciated by companies and clients as well. There are many online courses that can provide basic training quickly and will provide you with a certificate once you finish them. Another great way to become certified is through The National Association of Certified Credit Counselors, which is a well-respected educational provider as well.

    Register Your Credit Repair Company

    The credit repair industry is considered high-risk, so you need to get your affairs in order before you start with the business. This includes registering your company, choosing the appropriate structural organization, and filing for tax return. 

    Once you register your company, you’ll be able to open up a bank account for your business and make it official. In terms of business structure, most owners opt for an LLC, because of the benefits it offers. Consult with a tax professional or tax attorney to keep your taxes organized. 

    Set Up Your Price

    Remember that pricing is a key factor in your company's success. While you are free to charge whatever price you like, the average cost is $19-$149 per month. You can also see the prices of your competitors so that you can adjust yours.

    Bottom Line

    Now that you know the basics, you’ll realize that it’s not as hard as you might think to start a credit repair business. But remember, this is just the beginning. There are many more things to learn if you want to be successful in this industry. But with further research and some hard work, you can make your credit repair business thrive, improving one business score at a time. 

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