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Credit Repair Business Guide, Part I: Why Start A Credit Repair Company?

By: Daniel Rosen January 09, 2020

Raise your hand if you, or someone you know, has gone through a life event like:

These events are common, and even more common is the financial strain, credit disrepair, and undue stress these life events add to your life. While some of us might be lucky enough to have a helping hand guide us out of our financial problems, many others don’t know where to turn for help.

If you’ve been through it before, you know that financial stress can be among the most painful experiences in life. In fact, according to a recent study by Northwestern Mutual, financial issues are the number one cause of stress in America.

“Do you know what it feels like when you don’t know if anybody can help you? That’s a bad place to be,” says credit repair specialist, Pretty Washington. “I’ve spoken to clients who were about to give up on their lives because of their credit.”

credit repair startup Pretty Washington

Pretty Washington, pictured here speaking to the crowd of credit repair business owners at the Credit Repair Expo. [Photo/Nichole Bensel]

This drive to help others achieve financial freedom and a higher quality of life is precisely why Pretty Washington (and thousands of others) have dedicated their lives to their credit repair businesses.

What Is a Credit Repair Business?

Credit repair is all about helping others accomplish their goals through legal, legitimate, professional help. Credit repair specialists help individuals and business owners remove errors from their credit scores, and teach better credit habits for long-term credit improvement.

For those who suffer from poor credit, day-to-day living is more complicated and more expensive.

For example, without a good credit score, your clients might:

  • Be denied employment
  • Pay more to set up their utilities
  • Be denied a cell phone contract
  • Pay more for insurance
  • Pay more in interest

Increased costs push your clients further into the vicious cycle of debt - making it difficult to earn and save money to pay off the money they owe.

By working with clients to improve their credit scores, you’re able to help them get back on their feet. Securing affordable rates on lines of credit like a mortgage or auto loan can transform your client’s lives.

What a Credit Repair Business IS NOT!

While credit repair is mostly comprised of individuals looking to make an impact on their community, there are a few bad actors to protect your clients from.

As a credit hero, it’s important to show how your business is legitimate, and also to educate your community on the red flags that indicate a credit repair scam.

Legitimate credit repair specialists work in compliance with the Credit Repair Organizations Act (CROA), which is a federal law that regulates credit repair organizations in the United States. The act requires all credit repair businesses to advertise and communicate their services honestly with consumers.

A legitimate credit repair business will NEVER:

  • Make guarantees about score increases
  • Charge exorbitant fees without showing results
  • Tell clients they can’t repair their credit without the help of a professional
  • Lie to the credit bureaus
  • Falsify a person’s identity
  • Change phone numbers and addresses to get away from bad credit

These techniques are signs of a get-rich-quick scam and are not legal practices in the credit repair industry.

Want to know more about credit repair regulations? Check out credit repair laws in your state.

Why Do People Need Credit Repair?

No one is immune to life’s ups and downs, which means poor credit can affect anyone. There are, however, a few demographics that may be more prone to credit troubles.

Racial Discrimination

The most glaring issue with today’s credit system is that it disproportionately affects communities of color that have already faced historical oppression.

For example, research has indicated a bias against racial minorities when it comes to calculating risk assessment. Studies show that just living in a primarily Black neighborhood can hinder your ability to get a mortgage loan. Unfair lending practices that codify racism, continuing the United States’ long legacy of underhanded, institutionalized oppression.

Luckily, credit heroes can take the power back from the credit bureaus, and make social change a reality for people affected by racial discrimination in financial institutions.

Millennial Debts

The 2019 Average Credit Report in America study, conducted by Lending Tree, showed a pattern of credit issues by age. Surprisingly, the age demographic with the lowest score wasn’t the 18-29 bracket, which is comprised of those youngest to the financial world. Instead, Americans aged 30 to 39 were the largest population of consumers with a sub-620 credit score.

Geographic Impact

Geographic location may also play a role in credit score health. The 2019 Average Credit Report indicated that roughly 40% of the population in the following states are considered subprime:

  • Alabama
  • Arkansas
  • Florida
  • Georgia
  • Louisiana
  • Mississippi
  • Nevada
  • New Mexico
  • Oklahoma
  • South Carolina
  • Tennessee
  • Texas

Credit Scores Errors Impact Everyone

Now for the wildcard.

Even if you haven't been impacted by discriminatory practices or economic downturn, you’re not immune from errors that can impact your score.

In fact, credit errors are super common. Research shows that 79% of all credit reports contain errors. Consumer Finance Protection Bureau (CFPB) found that 1 in 5 credit reports have errors on them.

Regardless of why someone needs credit repair, where they are located, or what age they are - getting legitimate help can be difficult. And sorting out what needs to be done to improve your score can be taxing. That’s where credit heroes can step in and help. All communities, cities and states need qualified credit repair specialists, just like you!

Credit Repair and the Economy

Before launching a credit repair business, you might wonder how it can withstand the ups and downs of the economy.

Is the industry stable enough to rely on forever?

The viability of the industry is impressively unique. Clients need attention throughout both the highs and lows of economic prosperity.

Credit Repair In a Booming Economy

When the economy is good, credit repair companies are in demand for many reasons. Your clients might have discretionary income and are ready to get serious about securing a new mortgage or car loan.

To secure the best rates, your clients might need to improve their credit scores. For example, the national average credit score is 695, but the average homebuyer needs a score of roughly 728 for optimal interest rates.

Want to learn more? Read How to Improve Your Credit Score Before You Buy a House

Credit Repair In A Recession

Just as when the economy is doing well, credit repair companies are also in demand when the economy goes down.

As we saw with the 2014 economic downturn, tough times can have a direct impact on credit health. Many Americans lost their jobs. Home values dropped. Cash poor citizens were forced to make difficult decisions like whether to pay credit card payments, mortgage payments, or day-to-day needs.

Credit repair specialists can help those in this difficult situation to:

  • Combat the credit bureaus
  • Uncover errors that may be unnecessarily lowering a credit score
  • Work with creditors for better payment terms
  • Develop a plan for limiting the impact on a credit score

Learn more about how credit repair can have a significant impact when the economy is hurting, in Part II: How to Become a Hero through Your Credit Repair Business.

Learn the Basics of Credit Repair

One of the greatest aspects about starting a credit repair business is that you don’t need a fancy college degree, entrepreneurial experience, or even a background in finances to get started.

There are many tools and resources available for anyone — regardless of their background — to get started, with low overhead.

Learn more about starting and running a credit repair business from home!

Your credit repair business can change lives

Not only does credit repair help your clients meet the financial goals they’ve always wanted, credit repair can also give you the life of your dreams. Hear the stories of three credit heroes who have achieved success running their own business, and now enjoy the freedom of being a successful entrepreneur:

1. Seth Mitchell

how to start a credit repair business Seth Mitchell

[Photo/Nichole Bensel]

Growing up, Seth Mitchell says his only models of success had were the drug dealers on his street. Seth’s father, who fell into the street life, was serving a two-time life sentence while Seth was growing up. Determined to change his narrative, Seth made a choice to fight for his life. Rather than repeating the cycle modeled for him, he became an entrepreneur. Seth started a credit repair business, and quickly earned a seat in the Millionaires Club, as his company turns millions of dollars in profits each year.

2. Derrick Harper

Derrick Harper grew up in a low-income home, which motivated him to work harder for a better life. At the 2019 Credit Repair Expo, Derrick told the audience that he grew up so poor, that the floorboards of his childhood home had holes in them. His living quarters were poorly tended to, and roaches and rats infested his space. Destined to escape the life he was born into, Derrick created his own credit repair business. Now, as a member of Credit Repair Cloud’s Millionaires Club, Derrick can afford the lifestyle he always wanted for his family.

3. Ashley Massengill

Ashley first explored credit repair after she was unable to secure a mortgage loan due to her poor credit. Ashley dedicated her time to repairing her own credit and found fast success. She shared her progress on Facebook, and began receiving inquiries from others in her network who needed help with credit repair, too.

At the time, Ashley worked full time at the post office. She moonlighted as a pro-bono credit repair specialist, helping her friends and family repair their credit as well. Soon, she realized there was a great business opportunity for her in credit repair, and the market was far larger than she initially expected. That’s when she took the bold step of quitting her job and took the leap into full-time credit repair as a profession.

Within 18 months of launching her credit repair business, Ashley made over a million dollars, became inducted into Credit Repair Cloud’s Millionaires Club, and her husband was able to retire from his job. Now, the two can spend more quality time together and can afford a lifestyle they never had before credit repair.

No one is immune to poor credit, but luckily credit repair specialists can be the remedy that helps those in need recover financially. And, just because credit repair is selfless work, doesn’t mean it’s penniless. Those who decide to move forward in a credit repair business can earn a comfortable and fulfilling lifestyle for themselves as well.

Are you feeling inspired? Take action! Start your own profitable credit repair business today!


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