By Amber Hayden
MBA, Financial Business Research Specialist.
So you want to start a credit repair business?
Starting a credit business is easy and a lot simpler than you think. You don’t need a degree or a special license to start. However, it is important to be a member of organizations that ensure high standards and police the credit repair industry.
Starting A Credit Repair Business can be extremely lucrative and has a very low start up cost. All you need is a phone, a computer with internet access, an email account and a word processor program. However, If you have a smart phone this could be helpful to place reminders for your clients.
So many believe that they need a credit repair software program to start and manage their credit repair business. This is not true but you can purchase this much later when you have successfully helped enough clients after your initial training to afford the software. I actually recommend that you get excellent credit repair training prior to purchasing software to run your business and this is a must in my opinion. Why should you wait? It usually create MORE problems for consumers with untrained people using software than it helps. YOU MUST GET A FOUNDATION e.g. Advanced credit repair training prior to getting software in order to control it.
You may want to seek a source outside of a software company for your credit
repair training. Let me explain in details why.
Some credit repair software have many different company names e.g. credit repair training school or academy offering FREE start a credit repair business books, low cost credit repair and business training book but they are still steering you towards their software company with free trials and seeking monthly fees afterwards. You also will find yourself with $180 to $400 per month in expenses before you have any clients. This can be a recipe for failure for many.
I’m not against these companies or think they are bad or anything of this nature, I just know that there is a conflict of interests and they just want to sell software. But because you don’t need software to start a credit repair company, you shouldn’t have to incur the expenses during the startup stage.
Many of these companies are disguised as credit repair training centers. They often will teach you in such a manner that you will believe it is very difficult or too tedious to perform the work without software. Some companies will suggest that their software does things it CANNOT do.
PLEASE NOTE: NO credit repair software can legally pull consumers credit reports or load them from the credit bureaus. One has to have a permissible purpose to do so and credit repair company does not fit this legal standard. Therefore credit repair software are only effective management tools to use once you are fully trained in this business.
Just know that the software is NOT the problem but how they are used. You see, a credit repair software program CAN NOT Think for you and if you rely on it to do the job of disputing credit issues, it can actually hurt consumers.
Many are using software as their first source to starting a credit repair business before they are trained to do the work. This is because software companies spend a lot of money in advertising. When searching google to learn how to start a credit repair business, they are the VERY FIRST links you see and their training school is the second links. Also to consumers seeking to start a credit repair business will think, “it seems easier to just click buttons that will do the work for you.” However, what they don’t know yet is that this can hurt a client’s effort to increase their credit scores if the consultant is NOT FULLY TRAINED. Software companies are offering these courses but steering you directly to purchase their software. You do not want to do this first!!!!
Here is the main reason to learn the business first than buying software: Credit bureaus have caught on to all of these software programs and NOW you have computers that are recognizing computers. This means that if you submit a dispute using a software based generated letter even with a few changes, the credit bureaus computers often recognize them and can stall your efforts to resolving credit problems. Fully customized detailed letters will not face this issue but it difficult for these software programs.
Also, they may placed a flag on consumers accounts that they are attempting to repair credit using a credit repair company. Why is this important? According to interpretation of the Fair Credit Reporting Act, that law used to protect consumers rights, Credit Bureaus can refuse to investigate dispute if done by a credit repair company. Yes, you can get them to respond and it is within your right, but they have the right to reject what they consider frivolous claims. Why go through that hassle and time when you can get it right from the beginning to avoid this issue.
If you want to start a Credit Repair Business and be successful, you must separate yourself from all of the nationally advertised firms. You must brand yourself in a different way by offering maybe a personal touch to your services in your credit repair business. This is because you won’t be able to compete with the big firms that advertised on the radio and TV otherwise. Many consumers right in your community, will feel more comfortable with you instead.
As I stated in the beginning, you also should want to be a member of non-profit organizations that police the credit repair industry and ensure that their members maintain standards. If anyone says that you don’t need to be certified, it important to know this: Yes, it is true you do not need a special credit repair certification or certificate but you should want to be certified by a non-profit credit repair association. It will say that you are one that is ethical with standards.
A credit repair company can make from $500 to $6,000 per month for the average person working from home part-time spending about 20 to 30 minutes per month for each client. However, you will spend more time in the intake process on the initial contact with the client. You can earn $95 to $250 in the initial contact based on evaluating a credit report and produce a plan to boost your client’s score in the initial stage. If you are above average, you can earn $10,00.00 full-time and some are earning even as much as $75,000.00 per month. Yes, this much! Now think about this, where can you earn an additional $1000 per month with little effort and time for a start up company that will cost under $100 to get started? Many software based companies say that you can spend 5 to 15 minutes per client but this is NOT enough time to offer the credit repair personal touch service that you will need to be successful in this climate.
The big credit repair firms like Lexington Credit and CreditRepair.com already have huge clients due to heavy advertising and have account representatives. This is great for you because their advertising helps you in your local market. However, the reps of in these firms have so many clients that it is hard to feel connected. Therefore many consumers prefer finding someone close to them for help. This is to have personal services and not feeling as if they are a number among many. If you offer the same quality service as these big firms with a personal touch in your community, your business will soar.
Some credit repair companies charge $49 to $99 per month for their services. However one of the most successful method is to charge per deletion or per points increase. For example, some charge $85 per deleted item off a credit report for each account deletions and $50 per non-account deletion. Some add more for deleting collections or public records accounts. Some just charge the flat $85 for all items.
Let’s say you have one client and they have Five (5) challengeable accounts on their credit reports and 3 non-account items. You can earn up to $575 with that client: 5 x $85 and 3 x $50. This client will happily pay when they see these results. You can ask for an escrow payment to hold a portion of the funds to be received until the service is rendered. As service is performed, you will get paid. Just having two clients per month will earn you over $1000. Because most clients will have at least 7 to 15 accounts issues.
What if you have three clients per week? This is where you can earn over $6000 per month part-time. You will spend no more than 2 hours per week working on each new client and about 5-10 minutes per old client getting paid for another round of deletions until you complete them.
Here is an example: Say that you have 10 clients for one month. I like to be reasonable because many small based credit repair companies working from home can easily get 10-20 clients per month. Normally they will have 7 challengable accounts items on their credit reports. If you delete 3 items for all clients credit report that’s 30 x $85. You will earn $2, 550 but still have more to earn for the next rounds of challengeable items. Without getting a new client you will still earn another $2550 off the same 10 clients and depending on their accounts this could go on for about 3 to 6 months. The key is that since you are getting results, you will keep adding clients and watch your income soar.
As I stated, that one does not need a special license or a degree to start a credit repair company but there are rules for each state. A good credit repair training source will provide this information.
I would get my training from a source where credit repair training is their primary business model and have a interest to protect the industry. They will not attempt to sell you software or anything but provide you a solid foundation on the process of being a successful credit repair consultant. It is a great idea to get certified so that the public will have the confidence that you can do the job.
FTC and regulators recently stated at a conference that they want the credit repair industry to police itself because of past bad actors. However, so many are offering certification and training BUT are NOT concern about compliance or protecting the industry. Therefore a lot of people are now getting involved in this business without a clue of how not to cause harm to the public . If you are going to be part of the credit repair industry, align yourself with the industry’s non-profit trade associations because they makes protecting the public and training their mission.
I am recommending The Credit Consultants Association, Inc. They are a non-profit trade association organization offering excellent advance training and credit repair certification and great starting a your credit repair business. They also offer one-on-one phone coaching and email support if needed that is excellent. In addition, they are like the better business bureau of the credit repair industry collecting and resolving complaints from the public. Also they keep you abreast of various industry changes . It is their goal to police the industry and provide their members with compliance information. You should start a credit repair business and get credit repair training from them.
As I stated, you don’t need software. However, there are some good packages available for software when you are fully trained to do this business manually and ready to manage your business better. Some have cornered the market with their advertising and google searches but it doesn’t mean that that they are the best available package for growing companies. Many packages are great from startups companies with only a few clients but when that company grows and has many clients, some of these packages becomes extremely slow and frustrates business owners. That’s when these business owners looks for other solutions or creates their own.
Therefore, after you have done credit repair manually and understand how this business works by getting real results, then you should get software to help manage your business. However, NEVER allow these software programs dispute engine do all the work for you. When their simple disputes works for your client, use it but DO NOT throw away your word processor. Some challenges to credit bureaus and furnishers have to be customized for each client.
To sum it up, I’ve looked at all of them and many have great colorful designs and looks great and has many features. But I do have concern about how robust and safe they are once your company grows. I have been aware of companies losing their software clients data with one of the major advertised software companies and customer’s files mixing up when they have lots of clients.
Therefore, I really like. Credit Money Machine, Credit Money Machine Cloud. This company has been around for over 20 years and robust. I’ve never heard of a company that has outgrown this application. Credit Repair Cloud is a good software packages for startups and their software support is good. There are many more that are good startups packages.
However in my research, I could not find any mid to large size credit repair companies using these software programs except Credit Money Machine. But again, those other packages are an excellent startup solution once trained. There are some new packages on the scene lately such as Disco, Credit Score Techs and TrackStar. I will take a look at them and update this post accordingly.
Just make sure you get advanced training with phone support and credit repair certification prior to purchasing any software program. As I stated before, in my professional opinion, one should not use these software company’s training program. Repeating my reason again: it will usually train you to use their software instead of focusing on doing the work. So many are purchasing these business program laced with software in the beginning but shouldn’t in my professional opinion. It is NOT cost effective for startups.
Sales are very important to making money, but this is a personal business too and people want results. You should make sure you know how to do the work prior to selling this services. The goal is to get training first and learn how to not cause any harm to the public. These steps will protect this industry.