credit repair business

How Anyone Can Start a Credit Repair Business

What would you think if someone told you that you have the power to start a credit repair business? The shocking truth is that you actually can. In fact, for those that have the determination and willpower this journey will not be very hard.

Before Starting a Credit Repair Business

Understand the risks you will take.

The success rate for your business depends on the clients you handle. It is not possible to foresee how this will go. The market is also unfavorable toward credit repair companies that charge anything upfront. In fact, the FTC deemed it illegal. That said, a hands-on credit repair business will get involved in other ways which support immediate, profitable income.

If you think opening your own credit repair business is a good idea, what’s next? First you should get a better understanding on how you would start this kind of company. Once you grasp the scope of this process and your next struggles, you should know if it’s the right path for you.

In simple step-by-step format, here’s what you’ll need to do…

#1 – Choose Software for Your Credit Repair Business

Advancements in technology make it much less difficult for newcomers to quickly start operating a successful credit repair business. The latest software that people use in this industry is all “cloud-based,” and automates most credit repair related tasks. Thus, you can spend more time marketing and serving your customers.

What’s the Best Cloud Based Credit Repair Software?

Your new credit repair business has plenty options when it comes to software. Some popular products include TrackStar by HTDI, Credit Score Techs, Credit Dispute Pro and Dispute Suite Platinum.

Here’s a look at what each of those products offer…

TrackStar by HTDI

TrackStar is a credit repair software that’s offered by HTDI Financial. They are one of the oldest credit repair software companies in business today. With TrackStar, the typical time it takes to enter a new client’s information, pull their tradelines and create dispute letters is less than 10 minutes. You can also create just the dispute letters within 10 seconds.

Here are some great features with TrackStar:

  • Private labels: Personalize the software to fit your company’s branding instead of keeping it under the TrackStar name. Your clients will be oblivious to the fact that your business doesn’t actually own the software.
  • Server databases: Customer databases get loaded to your site’s server, under your website domain. You do not have to worry about an externally stored SQL database potentially causing a security crisis. In this business, it just takes is one SQL injection to steal all the information necessary to commit a serious level of credit fraud.
  • On-site logins: Both customers and referrals access their dashboards by logging in through your domain name. Many other software providers will have a custom domain separate from yours.
  • Email autoresponder: Automated responses and email templates are available through the TrackStar software. This feature automates repetitive email writing and, by saving you time, it saves you money.

Another great thing about TrackStar is that you pay based on your service volume. The pricing expands as your company grows. This pay-per-seat model is highly advantageous if you just started your credit repair business.

Credit Score Techs

Many credit repair software reviews recommend Credit Score Techs. This company released their software in 2007, three years after HTDI Financial came to market.

Here are some great features with Credit Score Techs:

  • Private labels: Just like with HTDI, Credit Score Techs lets you create a customized private label. Their software will exist entirely under your company’s branding so your clients see you as more of an authority.
  • Data security: Some credit repair software companies fail at the most fundamental aspect of their business. Credit Score Techs does not, as they go a step further by safeguarding information through segregated databases.
  • 99.9% uptime: You don’t want software that starts bugging out every few days. This program has 99.9% uptime, which means you don’t need to worry about losing time and money.
  • Email autoresponder: Along with MailChimp integration, you have the ability to send auto responses. You can generate your email templates by department, situation, etc., to provide high level support without lifting a finger.
  • Advanced management: Their softwares provides separate places to control different aspects of your business. You have dashboards for Customer Management, Referral Management, Affiliate Management, Account Management and Dispute Letter Management.

A downfall with Credit Score Techs is the unspecified pricing. You must call to get a quote based on your circumstances. Even so, the company’s higher level of customer service and excellent quality software make them a viable choice. It’s worth calling to see how they will price out against the rest, as they are arguably one of the top three credit repair software companies.

Dispute Suite

Dispute Suite has been a decisive choice for credit repair resellers. Their company founded in 2006 and has stood the test of time. Their staff are also very forward, documented on their website and actively involved in the credit repair industry. Most of their plans cost approximately $250 to $750 per month.

Here are some great features with Dispute Suite:

  • Private labels: Again, the custom branding, on-site logins and other private labeling features are crucial. Dispute Suite Platinum also understands that and provides complete private label services.
  • Electronic agreements: Many credit repair leads fall flat when too much time is invested trying to acquire the client. Through the ability to digitally sign credit repair agreements, your company can keep a stronger hold on your potential client’s attention.
  • Visual summaries: The dispute dashboard displays a pie chart quantifying the disputes by status. You can quickly tell the volume of disputes based on whether they are deleted, pending, repaired, letters past due and to be disputed. This visual data is provided along with details on the client’s credit reports – including the number of negative items in each of their reports, whether it be Equifax, Experian or TransUnion.
  • Upcoming features: This company is one of the rare few that let you know ahead of time what features will roll out in the future. Their Upcoming Features page shows the recently added features plus new ones that are still in development.

Final verdict: Saving time by cutting back on employee labor is a huge cost cutter. Investing in credit repair software should be a no-brainer. However, you must be careful with which service you choose – the features, customer support and pricing differs greatly.

#2 – Become a Credit Repair Specialist

As the business owner, you more than anyone must understand how the credit repair process worksfrom the business side. The best way to learn the ins and outs of credit repair is by taking relevant courses. You can do this at a brick and mortar institute or through an online schooling program.

Popular Credit Repair Certifications

Unfortunately, this industry lacks proper post-secondary vetting and the certificates that exist are not standard.

  1. The Institute of Consumer Financial Education (ICFE) offers a course called “ICFE Certified Consumer Credit Care Specialist,” which covers everything. In your studies you will learn how to master reviewing credit reports, analyzing credit scores and identifying repair options. You also get detailed knowledge on consumer debt compliance.
  2. Credit Repair Cloud (a software provider) offers an affordable training program. You not only learn how to handle credit repair work – this course also gives insight on how to start and run a credit repair business. This one-month course leads to a Credit Repair Training Certificate, it’s best for those looking to fast-track their learning experience.
  3. While more consumer focused, the super cheap Udemy credit repair course is a great precursor to more advanced training programs. You will learn the basics of how credit repair works. For newcomers to this world, the simplified explanations definitely help.

#3 – Determine if Your State Requires Surety Bonds

Now comes time to register as a credit services organization. During this process, you will supply both a surety bond and registration fee. This amount depends on the state – for instance, Minnesota credit repair businesses pay $1,000 to register or renew for every business location.

If your business operates out of any of these states, then a surety bond is required.

  • California
  • Illinois
  • Indiana
  • Maryland
  • Ohio
  • Oklahoma
  • Texas
  • Virginia

The surety bond you must place typically depends on the business and owner’s creditworthiness. If it’s for $25,000 or less, the cost of a surety bond is typically $400 to $1,200, but this figure can reach up to $3,750 if your credit is abominable. The underwriting measures for bonds above this threshold is more complex and more variables can influence the cost.

Also, take the time to learn the laws of operating a credit repair business now.

#4 – Build Business Plan & Payment Gateway

Now you need to assess your business plan from the professional side. Think about everything from client intake to privacy policies. Be cautious as to how you bill your clients.

You remember the part about it being illegal to charge upfront fees? While true, this law doesn’t necessarily create an entry barrier. Your credit repair business can charge milestone fees for each provided task. For example, you can ding your client after sending off a bunch of dispute letters. You could also provide a monthly service package by charging a fee based on letters getting written and sent out each month. Aside from that, you still get credited any time you successfully remove or reduce any of your client’s debts.

Next, you must set up a payment gateway. The two options here are a small business payment processor (such as PayPal, Stripe or Square) or credit repair software. The latter is a no-brainer, so just look for software that includes a merchant account.

#5 – Set Up an Attractive Website

WordPress is the simplest platform to use. You can purchase a premium WordPress theme (best source: ThemeForest) and avoid having to code. For experienced designers, you could also use a HTML5 template. Another option is to hire a professional or freelancer to set you up with a site. On Upwork, you can get the bare bones done for $500 to $2,500 most of the time.

You can limit your website’s functionality to taking in orders at first. Build an information portal for your clients so they learn all they need to about credit repair from your site. You can extend to account dashboards, build an app and offer interactive UI when you see growth. Information is the selling point. But, live chat support would also catapult you versus many less personal competitors.

Side note: Do you live in a large metropolitan area? If so, your business should attempt to compete with others through local SEO tactics. The high number of prospective leads searching for nearby credit repair services holds significant value. Further, showing up in Google search results in any capacity will increase brand recognition among your potential future customers.

Conclusion

credit repair business is a lucrative company to run. The entry requirements are minimal, the laws are simple and the overheard is highly calculable. With the help of the latest credit repair software developments, many newer repair organizations are seeing overnight success.

Without a doubt, starting a credit repair business is not a bad idea. You need to be business savvy and ready to focus your budget on marketing efforts. However, it can certainly pay off if you establish yourself as an authority in your region.

FAQs About Starting a Credit Repair Business

  1. What’s the market base like?

You are mostly selling services to low credit borrowers that need help. These people hope to see a credit score boost from your repair efforts. They are sometimes wrongfully given a lower score, due to credit report errors. Likewise, many credit repair clients were victims of identity theft at some point and need help cleaning up their report.

2. What common mistakes do these businesses make?

Without a doubt, avoiding credit repair software is a huge mistake. This tool automates many tasks and saves you tons of time. The value is easily there from the beginning, especially with some companies offering a pay-per-seat model. Fork out the $300 plus a month to make sure your credit repair business runs smoothly from day one.

3. What laws apply to credit repair companies?

The most obvious law, which applies in most states, is that you cannot charge upfront fees for credit repair services. You must also register as a credit services organization. To know what rights you do and do not have, don’t forget to read the Credit Repair Organizations Act.

4. What are the best marketing methods?

The best strategy is a complete one. Work on brand name recognition via social media, run behavior-based PPC campaigns, perform content marketing, do local SEO, etc. Essentially, you have three categories that define your marketability. They are your brand awareness, your digital marketing efforts and your reputation management.

5. Do you really need credit repair software?

This automation tool can save your business both time and money. Thus, it’s increasing your bottom line if you use credit repair software. Guaranteed, all your competitors will already have this tool in their arsenal. You can automate tasks like writing dispute letters for each of your clients.

6. How many clients do you need to succeed?

Most credit repair services run $50 to $100 per month. So, what does that mean if you manage to sustain 1,000 clients? At a $75 average, you generate $75,000 in monthly fees. At that point your business will be making $900,000 annually before overhead.

7. How big is the credit repair industry?

IBISWorld’s data suggests that the credit repair industry is worth $4 billion and employees more than 100,000 Americans. Their stats also indicate more than 90,000 credit repair businesses in existence. Other sites suggest the industry is worth $5-6 billion. Consumers are now taking credit repair more serious. This is thanks to the exposed scams and greater public knowledge on the subject.