From the basics of credit repair to advanced techniques for measuring, scaling and growing your business, this article will cover everything you need to know about operating a credit repair business.
1. Understand the Basics of Credit Repair
For many first time entrepreneurs, it’s easy to get bogged down in the particulars of starting a business without taking a step back and learning the meat of the industry.
If you haven’t already, you’ll want to learn the basics of credit repair. Specifically, one core piece of legislation, The Fair Credit Reporting Act (FCRA), will help guide your journey as a credit repair specialist.
What you need to know about this legislation is:
- You can dispute any item on your credit report
- If it cannot be verified, it must be removed
- 78 percent of all credit reports have errors
- Accurate items must be removed if they cannot prove them
To remove items, credit repair specialists simply send a series of letters to credit bureaus and creditors asking for validation, to dispute items, or to negotiate better payment terms.
The process is simple but can be time-consuming and tedious, especially if you don’t have credit repair business software to guide you. For this reason, while many Americans need credit repair, most people don’t want to go through the process alone.
While experience in the credit repair isn’t necessary to build a million dollar company, a bit of background can give you a competitive edge.
2. Learn the Credit Repair Process
To achieve success as a credit repair specialist, there are many creative strategies you can implement. Variations aside, the core process will look something like this:
- Get a lead
- Invite the prospect to a consultation session
- Sign the prospect up for credit monitoring
- Provide a comprehensive Simple Audit credit analysis
- Close the sale
From generating leads to closing a deal, Credit Repair Cloud software has features to assist you through the process. For example, Credit Repair Cloud users can take advantage of a free, professionally written website to help attract new business. Additionally, many credit repair specialists use the Simple Audit credit analysis as a tool to close deals and generate new business.
3. Create a Mission-Driven Credit Repair Business Plan
A business plan is the blueprint for your business operations. It takes the generic steps we outlined above and turns it into a customized plan for your business. Your business plan should drill down on short-term and long-term objectives with action steps to achieve your goals.
It should also clearly identify your goal as a mission-driven business.
Mission-driven businesses use their organization’s social conscience as the foundation and focus of their marketing communications. A comprehensive mission-driven business plan includes the following sections:
- Executive Summary: An overview of what’s to follow.
- Business Description: This section defines key aspects of your business, like what you do and what your unique value proposition is. In this case, you should identify that you are an organization driven by profit, but motivated by a mission: Offering credit repair services in order to empower your community and free them from the vicious cycle of debt.
- Market Analysis: Define who you plan to target with your new business. Many credit repair specialists find success using credit repair as an add-on to an existing business, or by targeting a niche audience.
- Competitive Analysis: What are other credit repair specialists doing, and how can you make your services better? Let’s say you notice a gap in customer service or a lack of accessible, reliable credit repair information for those in need. By becoming a reliable resource for an underserved market in your community, you can differentiate yourself from the competition.
- Operations and Management: This section will define where your business will operate (whether at home or in office space), who will be a part of your team (whether a sole proprietor or with staff or contractors), and what tools you’ll use to start and grow your credit repair business. For example, do you have a marketing strategy in place? Additionally, are there state laws you need to learn before creating a pricing structure for your clients?
- Financial Predictions: Selfless work isn’t profitless. This section helps you determine your companies viability. How many clients can you handle (or land) in one month, and what will that translate to in terms of revenue? How much is your overhead? Luckily, credit repair businesses are easy to operate at-home, which eliminates much of the overhead entrepreneurs usually face.
By creating a credit repair business plan you can clearly state your businesses intent, and start to determine weekly, monthly, quarterly and yearly goals based on your financial predictions.
4. Execute Your Business Plan
With a plan in place, you’re ready to start generating leads, closing deals, and making money.
A credit repair business can operate effectively through software and automation. For example, Credit Repair Cloud can ease your workflow through a variety of features:
- A repository of dispute letters to eliminate writing unique content for every client
- Scheduled reminders to note when it’s time to follow up with clients or creditors
- Templated responses to credit bureaus and creditors to help accelerate communication
- A client facing portal to help reduce time-consuming client communication that doesn’t require special attention (and frees your time for important contact)
- Tools to help with marketing efforts, new business acquisition and lead nurturing so you can maintain a healthy pipeline and close more deals
The workflows of credit repair are simple enough. However, to scale your business, you’ll also need to define the most efficient methods to get your work done, support your team, help more clients, and make more money.
5. Advance Your Credit Repair Tactics
Running a successful business over the long-haul takes continued effort. Focus on ongoing education to stay current with the best practices for credit repair and business operations.
- Perfect your sales script: Reflect on what you’ve learned from previous pitches, what is the most common problem your niche audience has? Are you solving it in your existing pitch?
- Improve your billing process: If you’ve been using a pay-by-deletion process, consider upgrading to a subscription-based billing system to further cut down costs when it comes to collecting money from paying customers.
- Carve out time for training: Whether you’re operating alone, or if you have a team to help you, take time to train yourself and your staff on best practices. Take credit repair classes, refer to resources, or find a mentor to continue pushing your practice to a higher level of professionalism.
- Get your clients on board with the mission: Credit repair is community-focused work. By improving the financial lives of your clients, you are improving your community. Work with your clients to generate more referrals, so you can continue helping others climb out of the vicious cycle of debt.
Additionally, many credit repair specialist begin stepping out in their community to showcase their expertise in the industry, provide outreach to members who need your services the most, and to start growing a network for continued business health.
6. Measure Your Impact
This step should occur throughout the entire business process.
In order to ensure you’re accomplishing the goals you’ve outlined for yourself in the aforementioned sections, credit repair business owners must diligently track their efforts.
Monitoring your progress and scheduling items of maintenance should be done incrementally throughout the year:
- Weekly: Create productivity checklists outlining your weekly goals, such as how many dispute letters you want to send or how many points of contact you aim to have.
- Monthly: Run reports to see how your revenue is looking, carve out time to respond to dispute letters, update clients on their status, and ensure you’re up to date on invoicing your clients.
- Quarterly: Check in on your marketing efforts. Have you started to generate more leads from your efforts? Review your overall business performance. Are you on pace for the annual revenue goal you set for yourself? Remember to pay your quarterly taxes. Paying annually is more expensive!
- Yearly: Check on growth goals; the fourth quarter is often a time for a mega-push to reach your year-end goals. Ensure your paperwork is organized and ready for tax season. Realign your business strategy to progress in the coming year.
Your success can also be measured qualitatively. How have you changed your client’s lives for the better?
Asking for feedback is a great credit repair business practice. Can you start to create case studies or testimonials showcasing how beneficial your services are? Can you ask for referrals from satisfied clients to help build your pipeline? These details will help you grow your business and continue to make a lasting impact on your community.
7. Become an Educator
Credit repair specialists go into this industry with one objective in mind — to help people thrive. That’s why many credit repair specialists take it upon themselves to become educators for their community. The idea is to eradicate bad credit by empowering people through action and education.
Credit repair is more than just sending dispute letters to the credit bureaus, it’s about making sure people within your community get out of debt, and maintain a healthy credit range for life-long financial security.
For more on operating a live-changing credit repair business, download The Ultimate Guide to Starting a Credit Repair Business today!