If you are reading this, you are likely interested in starting a credit repair business. The truth is, starting a credit repair business is actually a lot simpler and easier than many people might think.
And while the entire process might be easy, there are too many platforms and resources on how to go about it that it can become a bit confusing. Instead of focusing on how to actually start the business, you might find yourself spending a lot of time figuring out which resource is right for you.
Thankfully, this article cuts through the noise and provides the correct information on how you can start a credit repair company while saving a lot of money.
Want to know how to start a credit repair service or any other type of business? Find everything you need here.
How to Start a Credit Repair Business: What Do You Need?
Certification
First things first: you don’t need a special license when starting a credit repair business. You don’t even need a degree to be a credit repair specialist.
You do need to be compliant, which means that you must belong to a credit repair trade association that enforces strict policies and high standards. The FTC and CFPB encourage the credit repair industry to monitor itself.
When it comes to credit counseling trade associations, two associations stand out. These are:
- The Credit Consultants Association (CCA)
- The National Association of Credit Services Organizations (NACSO)
Both organizations have a different approach when it comes to their certification process.
Since the CCA is the oldest, it has the most members. The association certifies individuals instead of companies. It receives complaints from customers and even carries out investigative procedures to extricate bad credit repair organizations. To gain certification, an individual needs to pass the exam, after which they must strictly follow all the guidelines.
Since the association deals with individuals, it also has a civil/criminal background check system for vetting every credit repair consultant as well as the owners of each company. The system also checks certifications and education.
NACSO takes a different approach by ensuring that credit repair businesses are compliant. It does this by checking sales scripts, contracts, and documents of businesses.
The process of getting a NACSO certification can be quite cumbersome. The certifying body must ensure that the business has all its sales scripts and documents in order. Compared to CCA, which has yearly fees, NACSO has a monthly membership fee that goes into lobbying the interests of the industry.
These associations are important, and it is usually a smart choice to be a member of both if you can afford the fees. You should also only get your initial credit repair training and certification from a trade association.
Use the Best Credit Repair Software You Can Find
Planning your work and leveraging automation can be the most effective way to start and grow a credit repair business. With the right software, you can reduce the amount of time things take. For example, you can cut down the time it takes to create audits so you can focus on managing your clients.
The following tasks are likely to benefit from automation:
- Sending repetitive emails, such as introduction, drip campaigns, and service updates
- Creating customer profiles from a form fill
- Sending dispute letters to credit bureaus
- Tagging and audits of negative credit report line items
- Customer service management
With the right software, you can be sure of a scalable business.
Understanding Your Business Structure
One of the most effective ways to become a leading authority in the credit repair business is to develop a business plan. An effective business plan has the following components:
- Basic operations
- Business structure
- Finance
- Outreach initiatives
- Sales strategies
This plan provides details on why you want to launch your company and how you plan to do it. It highlights all the associated start-up costs like inventory, assets, and software. It is important to be specific about your business goals and how you intend to turn a profit. Also, you should indicate how you plan to scale the business in the future.
For this, you should have metrics in place that help you identify how close you are to your goals. This means you need to pay attention to your KPIs or Key Performance Indicators.
Streamline Your Business Strategy
Every client that comes to your credit repair agency should have the same experience, regardless of their issue. Their experience should be predictable, effective, and most importantly, very professional.
To become a successful credit repair business, it is crucial to fully understand every stage in your processes and the reasons for each process. When it comes to dealing with a client in the credit repair business, there are a couple of foundational steps you need to be aware of:
- Pay attention to your customers’ needs and provide a valid timeline
- Get a copy of your client’s credit report
- Provide a free consultation based on the report
- Create expectations based on their desires and the outcome of the consultation and report
- Process the full credit repair audit
- Create a plan that ranks the pertinent fixes
- Implement the plan using the best credit repair tactics
- Provide post plan recommendations and support
You must follow these steps, especially when you are just starting out. Implement them the same way with every client, although it is a good practice to add a bit of flair to the process.
It is necessary to be forthright with your client at every stage, as this enables them to understand what you are doing. You should also pay attention to your clients’ needs. This will give insights into how to keep their scores from going down after you render your services.
And if you want to take things a step farther, check out why you should set up your company as an LLC.
Targeting the Right Audience
While the most effective way to expand is to have experience, there are other things you can do to push all that along. Marketing your credit repair services can be another way to grow your business inorganically. What you have to do before creating a marketing strategy is to understand the demography you are trying to reach.
Some credit repair businesses target individuals who just had their loan applications rejected. These individuals have a reason for using a credit repair service since they know their loan can get approval once they have a higher credit score.
Understanding your target audience also means identifying individuals who do not require your services.
For example, someone under 25 is unlikely to have a bad credit rating compared to someone in their late 30s. Also, you are likely to find that individuals who are 65 or older tend to either have great credit or aren’t quite bothered about fixing their poor credit score.
For your credit repair company to be successful, you need to find the right audience that’s young enough to want to fix any credit problems they have accrued.
When you plan your credit agency, you have to consider targeting the right audience and market. Try to place yourself in their shoes. Doing this is called understanding a buyer persona. When you understand a buyer persona, you can understand what your prospective client needs before they even consider it.
Develop a Great Pitch and Have the Right Skills
The most effective way you can sell your services to someone with credit issues is to systemize and automate the process of client acquisition. It might be even possible to develop affiliate relationships as a credit repair specialist with mortgage brokers, attorneys, and CPAs. These can help funnel clients to your new business. When you steadily grow your credit repair business, you gradually open yourself up to a higher tier of revenue.
That said, developing relationships with affiliates might take a while, but it is extremely vital and can be worth it in the long run.
Any sales pitch worth its salt begins with an agreement. An agreement, in this case, is not a contract that requires a signature. Instead, it is a consensus that you and your prospective clients are on the same page. Both of you understand how this credit repair relationship moves forward and the expected results. The foundation of this agreement is being able to ask your clients questions and listen to what they want or their goals.
Once that is done, you can highlight your selling points, which also happen to be their pain points. Let them know your services, perks, and offerings, and make sure they understand that your services are nothing like what’s found anywhere else.
Overall, make sure that there is a consensus on the budget and the time frame. Ask for the sale and close it with the customer agreeing to your credit repair business services.
