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Predatory Credit Repair vs. Life-Changing Credit Repair. Do You Know the Difference?

By: Daniel Rosen June 03, 2019

Starting a credit repair business is humanitarian work, or at least it should be. The ability to help members in your community overcome hardships, and fight against a system designed to keep you in debt is empowering and fulfilling work that changes people’s lives.

how to start a credit repair business_3-1Successful credit repair business owner Pretty Washington speaks about the importance of life-changing credit repair at the 2019 Credit Repair Expo.


Did you know that the Federal Trade Commission conducted a study which found that one in four consumers discovered errors when checking their credit reports? And four out of five consumers who disputed the errors saw a boost to their credit score.

An improved credit score means:

  • Lower interest rates
  • Lower premiums for auto and homeowners coverage
  • Improved odds of being approved to rent an apartment
  • Better value cell phone plans
  • Decreased deposits for utilities


That’s why, by stepping in to find credit errors and then filing dispute letters on behalf of your clients, you can change their lives. We could go on and on about the positive impact credit repair can have, but first, we have to address the stigma against it.

Why All The Negativity?

There are bad actors in every industry, and unfortunately, the credit repair business is no exception to the rule.

Maybe you’ve heard some of the common credit repair scams:


Let’s set the record straight. These are fraudulent tactics and they are considered predatory credit repair tactics.

As a legitimate credit repair specialist, it is critical to differentiate yourself from this small subset of the industry and discuss the proper techniques to rebound from a poor credit score.

Overcoming Credit Repair Stigma Helps Your Community

Spreading the word about differences between predatory credit repair and life-changing credit repair can benefit thousands of people in your community and make you feel like a hometown credit hero.

The best way to overcome the stigma of credit repair is to educate your community on how to protect themselves from credit repair scams, the laws that govern legitimate credit repair, and how it is possible for them to find help without fearing dishonesty.

Focus on Laws Governing the Practice

There are federal and state laws that specify how credit repair specialists can operate, and how consumers are protected. If you want to run a successful credit repair business, you need to become familiar with the basics of these laws.

The Credit Repair Organizations Act (CROA)

The CROA is a federal law protecting consumers from predatory credit repair companies by outlining the terms companies must adhere to before rendering services to their clients. According to the FTC, the CROA specifies the following:

“The Consumer Credit Protection Act prohibits untrue or misleading representations and requires certain affirmative disclosures in the offering or sale of "credit repair" services. The Act bars companies offering credit repair services from demanding advance payment requires that credit repair contracts be in writing, and gives consumers certain contract cancellation rights.”

In short, the CROA requires credit repair services to advertise and pitch services honestly to consumers so as to protect them from being overcharged and underserved.

Credit repair laws by state

In addition to CROA, each state has laws on credit repair that specialists must abide by. These regulations define:

  • What is considered a credit repair service
  • What documentation you need to act as a credit repair specialist
  • Business and financial industry laws that credit repair specialists must operate under


Click here for a full list of credit repair laws, by state.

Teach Your Community to Spot Red Flags

Inform people of the ways they can spot a shady credit repair business so they can protect themselves from credit repair scams. Your community members should look out for credit repair companies that:

  • Don’t offer a contract with their services: Never agree to pay for something without having a written record of the details
  • Leave out critical details on a contract: If a credit repair company ignores details like rate, timelines, and services rendered, don’t sign the contract
  • Ask for payment upfront: The law prohibits credit repair companies from charging fees before performing a service
  • Request you waive your rights: If a business asks you to waive your rights under the Credit Repair Organization Act (CROA), beware. CROA voids all waivers of rights
  • Fail to provide a copy of “Consumer Credit File Rights Under State and Federal Law”: This document details the rights to obtain a credit report and dispute inaccurate credit report information
  • Recommend you open a new social security number or employer identification number in order to obtain a clean credit profile

Make Your Own Impact


Take the reins and bring credit positivity to your community. Start your own credit repair business to help show folks in your sphere of influence that financial freedom is possible for them to achieve.

To start a credit repair company, most entrepreneurs take a training course, or go through a certification process to help:

  • Learn the ropes of the industry
  • Discover how to build a business plan
  • Become equipped with training and tools to help clients most effectively
  • Build trust with prospects that you’re a legitimate business


The American Credit Repair Academy is a great place to look for training, resources, and credit repair certification.

You can also join in on Credit Repair Cloud’s online training to learn more about life as a credit hero.

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