How To Start Your Own Credit Repair Business Successfully?

Since the 2008 financial crisis, people have realized how easy it is to go from 100 to 0 regarding financial security and readiness. That makes credit reports quite crucial for any individual or even business entity, for that matter. As a result, a growing demand for businesses offering credit repair services has grown in the last decade or so. 

One in every three Americans has incorrect or faulty information on their credit report, according to a 2021 article published by CNBC. That is a massive number. Even if a fraction of those people are willing to spend money fixing their credit reports, you have a lucrative market to start a credit repair business. And it is easy to get started.

You don’t need much. You only need a laptop, a phone connection, a bank account, and a few formalities to get your credit repair business going from home. Below is a guide that breaks down how to build your credit repair business in easy steps.

Step 1: Make a Credit Repair Business Plan

You can start a business tomorrow if you want. However, to stick to the landing, you must spend at least some time and effort planning the steps you must take meticulously. The following list could look much longer for you depending on your readiness to put things in motion. However, we have covered some basics that you should plan before proceeding further.

●    Get a Bird’s eye view of your business goals: What is your overall objective and ambition for your credit repair business? Answer this question by making an overall plan for your business. Your plan should answer questions like- Why are you pursuing this particular business, and what end goal do you want to achieve? Most importantly, pen down the steps you will take next to accomplish those goals.

●    Determine your offer: You can’t sell until you have something worth buying. You should develop a detailed offer or MVP(minimum viable product). An MVP is essentially the value-add you are offering your customers. Hence, plan how you would distinguish your credit repair services from other players in the market. What are you offering, or how are you offering those services better than or different from everybody else? Once you have an answer to that, your offer is ready. 

Step 2: Familiarize yourself with applicable laws

The first rule of starting a business is- Be on solid ground, legally. If you are aware of all the applicable laws and requirements, there won’t be a possibility of you violating them during your day-to-day business operations mistakenly. Below are the laws and legal requirements you should familiarize yourself with before starting your credit repair business:

●     Credit Repair Organizations Act (CROA): This law governs credit repair businesses in the United States. Its purpose is to prevent businesses from exploiting clients. It would help if you researched more on the set of laws laid out under CROA, but below, we have condensed the gist of its primary restrictions on credit repair businesses:

○ You are not allowed to mislead your clients in any shape or form regarding the service you are providing;

○ You cannot promise them anything that you are not in a position to deliver;

○ You have to provide a written agreement to your client, which they should consent to by signing. The agreement should allow the client to nullify the contract if they choose to do it within three days.

○ Under no circumstances can you take money upfront or in advance from the client without providing any services. Usually, companies provide an initial consultation or a free credit report audit before entering into any monetary transaction with clients.

●    Bonds mandated under State laws: Apart from federal laws, several state laws in the US require credit repair businesses to get surety bonds to run a credit repair business. Certain states require surety bonds to protect clients against unforeseen damage from your services.

●    Registration: Some states require registering your business as a Credit Services Organization or a similar entity. Given the fact that registration requirements are different in different states, you should do some research about the specific requirements of your state.

Step 3: Get the Best Credit Repair Software

Now that you have built a business plan and learned about the various applicable laws, it’s time to manage clients and get their credit reports audited. That is where you can rely on automation to give you a helping hand. We strongly recommend not to proceed until you get the best credit repair software to start a business. A well-equipped credit repair software can be of immense help, especially at the beginning of your business. A robust, responsive, and user-friendly credit repair software for professionals can help you with a long list of operations. Below are a few important ways credit repair software could be of incredible help.

● You can complete the most crucial aspect of your service through credit repair software, i.e., auditing clients’ credit reports and tagging negative items on those credit reports. Your entire service model depends on how competently you can parse out incorrect negative information on your clients’ files to get them removed. The software will do that for you.

● The next step is raising disputes on those incorrectly mentioned negative items. A credit repair software for professionals will help you with that too. You can draft dispute letters and send them to credit bureaus via the credit repair software. The software will automate the process, speeding up the time it would have taken you to manually send out dispute letters for every client.

● You can set up a form your clients will fill out to set up their accounts on your credit repair portal. The profile creation process is entirely automated on credit repair software.

● You can use the portal to send emails for marketing campaigns or service updates. You no longer have to email every one of your clients to contact them.

Step 4: Get a customized platform for your business

There are a few things you need to decide on. You have to decide on a name for your business. Choose wisely, as the name of your business will be the brand’s identity you are trying to build. The same goes for your logo design as well. However, nothing represents the essence of your business quite like your very own website or application. An online platform makes running a business and interacting with your clients incredibly easy.

You probably think, “But I don’t know how to build a platform,” or “isn’t website development costly?”. Worry not. You do not have to be experienced in website building. All you have to do is hire a reliable and trustworthy Custom web design and development company. A company worth its salt would be able to provide you with a customized platform in a time-efficient and cost-effective way. If you are still not convinced, then below are some more reasons why you should build a website:

● This is 2023. No business can survive in the long run without an online presence, regardless of its scale and industry. So you have to have a website.

● Social media profiles are a good addition to your online presence. However, they are not a substitute for a custom website.

● Having your portal would make it so much easier for you to communicate with clients. 

● A website will help you gather data and feedback from your audiences, allowing you to improve your offer and services continually. Hence, you will be able to attract even more clients.

● It may take a little bit of time to get your portal live, but in terms of meeting your business needs, nothing can compete with a customized website or application built specifically for you. 

Step 5: Market your service to get clients

To get a steady flow of clients, you must market your business and get the word out. Only when people know about your service can they contact you to sort out their credit affairs. There are several different ways you can market your credit repair business. Some of them are:

● Provide your website link on all of your social media handles. Ensure it is visible and easy to access for anyone visiting your social media page. You can get customers from all social media platforms, be it Facebook, Instagram, Twitter, or LinkedIn.

● Make sure your website is SEO-friendly. By continually appearing in search results, you can attract a lot of organic traffic to your websites. You can then convert those visitors into clients. 

● Seek out affiliates who can promote your services in exchange for a commission or fee. If you cannot pay affiliates at this point in your business, you can always incentivize existing customers or ask them for referrals and testimonials. Social proof can bring in new customers for you.

● Paid advertising is a highly effective method of building a reliable customer acquisition channel for your business. However, you will need a budget for running ads. Hence, it is recommended that you should rely on the first four methods initially. However, as your business grows, you should transition to a paid ads model for reliable customer inbound. 

Conclusion

There is still a lot that you would have to do in order to set your business up. You would have to open a bank account, register as an LLC (Limited Liability Company), and set up a payment channel to receive client payments. The list goes on and on. But with the five steps mentioned above, you have a decent jumping-off point for your business. Once you finish these basics, you will be ready for the next set of challenges.