Financial literacy isn’t always taught in school. Instead, it’s something we hope we learn from our family and friends — or at the very least, pick up along the way. But the financial system is built on many variables, too many to understand without a finance degree. Credit card companies and retailers spend billions of dollars on marketing to pull us away from rational financial thinking, so it’s no wonder many Americans find themselves battling debt.
Millionaire credit repair business owner Jose Rodriguez talks to the 2019 Credit Repair Expo crowd. Jose regularly visits high schools and teaches young people how to stay out of debt.
Luckily, as a credit repair specialist, you are equipped with the tools, knowledge, and skills to take back the power and transform your clients’ financial lives. You can be someone who takes a client’s credit score from too poor to "play" to one that provides financial freedom – helping them secure a mortgage, get a car, or even land a job that changes their lives forever.
Understand the Uphill Battle
In some cases, your clients will be facing unavoidable hardship like suffering from a job loss or being victimized by a natural disaster. Even some military personnel find themselves battling credit issues since dealing with finances during deployment isn’t always easy.
But, for the average American, a poor credit score is more likely a direct result of how he or she understands personal finance. Discussing credit health has been a notoriously taboo subject, and without formal training on the matter, it’s easy to pick up dangerous spending habits or misunderstand basic finance principles.
In fact, an article by Fortune suggests that two-thirds of Americans can’t pass a basic financial literacy test. Poor financial education leads to real-life consequences. According to a CareerBuilder study:
- Nearly four out of every five U.S. workers live paycheck to paycheck
- Over a quarter never save any money from month to month
- Almost 75 percent are in some form of debt and assume they always will be
Once your clients start down the path of increased debt, the costs associated with it like overdraft fees and late payments increase the costs of their bills. And, unless an unexpected windfall of cash occurs, the mounting fees will lead to an eventual default. Once the cycle begins, it’s easy for your clients to feel trapped, like there is no way out.
Break the cycle by eliminating the taboo
As a credit repair specialist, step in and be the first to tell them there is still hope. Break down the walls guarding an open financial discussion, and talk about credit, how prevalent financial mistakes are, and how it's possible to fix them.
Regardless of how your clients got into the financial situation they are currently faced with, as a credit repair specialist you are the secret weapon they need to take back the power and help them achieve financial wellness and control over their lives.
Finding the Easy Wins
Clients who find themselves facing financial difficulties may have the propensity to give up and concede to their life sentence of debt, continuing with frivolous spending and lack of saving.
Stop those bad behaviors in their tracks. Step up and become the credit hero they need by identifying some quick wins that inspire hope.
For example, did you know that 78 percent of all credit scores have errors on them? It’s possible your clients have erroneous marks on their credit score weighing them down. Perhaps a creditor or credit bureau can’t verify their debt. In both situations, unproven debts must be removed, which will help your client’s credit scores and set them on the path toward success.
Every client you work with will come to you with a different story, but the end result should look like the same. Credit repair companies should inspire and encourage their clients, clearing the path toward financial freedom and guiding them on their journey.
Teach Lifelong Habits
Let’s say one of your clients is working tirelessly to climb out of debt, but in a moment of weakness made a single ‘treat yo self’ purchase on their credit card that already has a revolving balance and comes with a 30 percent interest rate (which is realistic for clients with poor credit).
Do they know that their mistake could wind-up costing double or triple the original sticker price after interest, tax and other fees associated with a non-cash purchase?
At that rate, what was once a $20 purchase ends up being closer to a $40 or $60 purchase. If your client had a stronger understanding of interest, would they have made the same choice?
How to step in as the credit hero
Work to shape your customer’s relationship with consumerism by reminding them to ask:
1) Do you need it? Or do you just want it?
2) Are you trying to keep up with the Jones’, or can you actually afford it?
3) If you don’t have the funds on hand, how much will this purchase cost you in the long-run?
4) How do you feel when you spend?
5) How do you feel when you get your credit card bill?
Stop and think about these questions for a minute. Does the feeling of a new purchase outweigh the stress of having debt? Probably not.
The most heroic credit repair businesses do more than send dispute letters and assist in the removal of negative items from a credit report. In order for clients to avoid the situation they’ve found themselves in, credit repair specialists must also teach good financial habits.
Empower your clients to be their own credit hero
Help your clients avoid misspending by educating them on basic financial techniques that can positively impact them for years to come:
- How to create a budget that matches their earnings
- The basics of interest, and what accounts can help grow their money strategically
- Pay credit card bills weekly to get a better grasp on how much money you’re spending
- The importance of automating bills so that your clients reduce their risk of late fees
- How to analyze bills and look for frivolous spending, or areas where they can cut back
When you change the financial mindset of clients, you help them repair their credit and have a better financial future. Teaching lifelong skills is what makes a credit hero different than one-off credit inquiry removal services or those sketchy credit repair companies that promise results, but fail to offer transparency or education to protect their clients in the future.
Show Your Clients New Opportunities
The two most commonly used credit scores, VantageScore 3.0 and FICO 8, break credit wellness into buckets ranging from 300-850:
- 300-629: Bad credit
- 630-689: Fair credit, also called “average credit”
- 690-719: Good credit
- 720 and up: Excellent credit
Because a credit score is a risk assessment, which allows lenders to determine if they will be able to make their money back from a borrower, each bucket is more than just a number on a piece of paper. It carries financial implications.
And, the cost of poor credit is expensive. With poor credit your clients:
- May not be able to receive financing
- Will have loan and apartment applications denied
- Will be required to put more money down on utilities
- Face difficulty securing a cell phone contract
- Have fewer employment opportunities
Having poor credit is expensive, your clients will pay more for just about everything -- in the form of both money and time. But, by improving their credit score to good or excellent credit, you’re transforming their lives to be more affordable now and in the future.
Help More People
Word spreads when you provide good service. And the more good work you perform, the more lives you can transform.
In today’s hyper-connected world, word-of-mouth is more prevalent than ever. According to Nielsen, 92 percent of people trust recommendations from friends and family over any other type of advertising. Further research shows that word of mouth marketing may account for more than $6 trillion of annual consumer spending which is approximately 13 percent of consumer sales.
By proving your worth, and transforming the lives of your clients, you can build a profitable business based on referrals and ongoing customer satisfaction.
Are you ready to become a credit hero for your community? Learn how to start a credit repair business today.