Credit card debt is a debilitating issue that has somehow become a part of life. However, mindsets around debt are changing, and many people are trying to correct their credit scores to open up new opportunities in life. Whether they are pursuing a life of financial independence or trying to buy their first home, credit repair agencies can help.
If you are looking for a unique business opportunity or want to help others pursue financial wellness, this might be the business for you. Here is how to start, build, and grow a successful credit repair business.
Research The Legalities
First, start by researching the legalities to understand what you can and can't do as a credit repair agency. Credit repair companies are held to specific regulatory requirements to protect consumers from predatory practices. While these regulations create a few more hoops for you to jump through as a business owner, they're ultimately a good thing!
Take some time to read through the Credit Repair Organizations Act (CROA) to understand your obligations as a credit repair bureau. Some key highlights include the acceptable contract format and the inability to charge in advance for services. In other words, you must present a written contract that truthfully outlines what you will do and provides a reasonable cancellation period. You must also provide services before charging. Depending on your state, you may be required to secure a surety bond and licensing to operate your business.
You should also take this opportunity to research what creditors can and can't do, as this information will help you provide your services.
Register A Formal Business
Once you understand your obligations, it's time to register your business as a legal entity. As you navigate this process, consider putting together a formal business plan that outlines your services and brand elements. Calculate the costs of getting started and determine whether you need financial support. Fortunately, starting a credit repair business is inexpensive as you only require basic tools and can work from anywhere.
Invest In Quality Systems
One of the key tools you'll need after you start your own credit repair business is tools and systems to get the work done. You can do everything within a credit repair business manually. However, if you want to build and grow your business, systems are necessary for time management. Investing in systems is essential for success.
Look into credit repair software that you can use to formulate letters to credit bureaus, track clients, and track progress. You'll also need systems for invoicing (ideally with subscription payment functionality) and marketing tools. Having a website and a social media presence is a must for building an audience and cultivating trusting relationships with leads.
Understand And Develop A Process
Take some time to understand the credit repair process and develop your own approach. Most credit repair businesses thrive on a subscription service, in which customers pay a monthly fee until the project is done. As the CROA regulations don't allow upfront payments, you may decide to start with an initial consultation and credit freeze as your first charge.
From there, outline a clear process of how you will approach agencies and file disputes. Using software can guide this process. Remember that it's better to get things done as efficiently as possible rather than trying to extend timelines. Satisfied customers who don't feel like they're being scammed will share their positive experiences with others, for some cost-free word-of-mouth marketing.
Create A Marketing Strategy
Outline how you will attract new customers and build an audience. Create a marketing strategy to bring your vision to reality. One of the common mistakes new business owners make is trying to do too much at once with marketing. Instead of committing to an email newsletter, sharing content on all social media platforms, and writing blogs, start with the low-hanging fruit. Clarify where your ideal customers spend their time, then choose one or two relevant social media platforms.
The key to creating great marketing collateral is to provide value. Identify what people are asking about their credit scores and credit repair. Then, create content that answers those questions.
Find Your First Clients
Once your business is ready, go find your first clients. Consider offering free services to a few friends or colleagues for a testimonial and review. This is a great way to test your process.
By following these steps, you can start and grow a successful credit repair business.
