Some car owners know enough to fix a lot of things on their own, but when that check engine light comes on, most of us would rather take our vehicle in to see an expert rather than diagnose things on our own.
That’s sort of how credit repair works.
While we might know something is wrong with our credit score, and even the basics of how credit repair works, but paying an expert makes for a smoother, and more precise process.
How Does Credit Repair Work?
When looking to repair credit, what can a consumer do on their own to dispute negative items and improve their credit? Quite a lot, actually. Any (adult) person without credit repair training can:
- Look at their current credit score month-to-month with the purchase of credit monitoring service
- Send effective dispute letters to the credit bureaus and follow up with them month-after-month
- Stop bad habits of overspending and overborrowing and create better habits of staying with their limits
- Research and understand how credit works and how to work credit to their benefit
There are many things a person can do on their own to improve their credit and fight the credit bureaus. Yet, most people are not willing to put in the work or use their time to become an expert in credit when they are trying to keep hundreds of other plates spinning in their lives.
That’s how credit repair companies go to work for you.
So, How do Credit Repair Companies Work?
Firstly, a credit repair company consistently follows up with both the client and the credit bureaus.
Secondly, a credit repair company has a vested interest in increasing their client’s credit score and will not be discouraged or take pushback from the bureaus personally.
Finally, (this may be the most important thing a credit repair company does) credit repair companies accumulate hours and hours of experience and continue to develop a level of expertise in credit repair that only someone who has dedicated themselves to credit repair can attain. Credit experts know the intricacies of how credit repair works better than consumers ever will.
What Does a Credit Repair Company Do?
Research the laws and best practices
The top credit repair business owners dedicate themselves to hours of training and professional development before they even start a credit repair business. In fact, many successful credit repair business owners start out in an adjacent field such as mortgages or real estate and focused on credit repair after it became more profitable than their main gig.
Researching and understanding the laws and best practices of credit repair in their state or area is a critical function of every credit repair company. This takes a lot of time and dedication that most consumers are not willing to offer. Yet, credit repair companies can easily acquire proper training and education. In fact, you can start a credit repair company from home fairly easily with the right training.
Consistently and systematically dispute negative items month after month
A credit repair company starts by reading a credit report and discovering the negative items, then gets to work at disputing and removing the negative marks to increase the credit score. A credit repair company will:
- Write effective dispute letters
- Understand how to negotiate with creditors on their clients’ behalf
- Respond to the bureaus quickly and efficiently
As this Entrepreneur article says, "Don't Just Start a Business, Solve a Problem."
Engage with the financial experts in your community
Credit repair companies work by making money through referrals from financial affiliates. This means that a credit repair company develops great relationships with mortgage brokers, real estate agents, loan officers, and other financially-associated businesses in the community. What a credit repair company does for a client extends beyond the process of credit repair. They are able to help clients find reputable sources for future needs, such as buying a home or getting a loan for a car once their credit is improved.
Not only can credit repair companies be a great referral source to reputable local financial companies, they build relationships to more easily share important information with local financial affiliates about how to maintain good credit. This shared knowledge creates better credit habits throughout communities.
Draw upon hundreds of hours of experience
Credit repair business owners gain hours of experience over hundreds of clients allowing them to see patterns and better help clients. Even when starting out with no credit repair experience, a credit repair business owner who signs up for Credit Repair Cloud’s software gains access to a wealth of knowledge from fellow users in the private online community and the support of the team of credit repair experts.
Understanding credit repair is simple, but there will always be situations where it is good to consult with fellow credit repair business owners to get the best result for consumers. Many credit repair business owners continue to train and learn the best practices for the credit repair industry as they grow.
Educate clients on other aspects of financial well-being and teach better credit habits
So what does a credit repair company do to ensure that their clients do not end up as repeat clients? They educate clients on how to create better credit habits, how the bureaus work, and changes to make tor their financial lives to maintain excellent credit.
A credit repair company can tell consumers things like:
- Only use up to 30% of any line of credit
- Make a plan to pay down existing credit that is over 30% of the credit available
- Create calendar reminders or auto-pay online to pay existing bills on time
- Do not apply for more credit
Aside from accumulating hours and hours of experience, there are many things consumers can do on their own, but most are not willing (or able) to invest the necessary time and energy It makes more sense for consumers to spend a small monthly amount for the peace of mind as the negative items on their credit report are being disputed month after month by a trusted company and resolve with a credit score increase.
Know how to grow a credit repair business
Unlike becoming an expert mechanic, building a successful credit repair company only takes a computer, a phone, and a plan to help individuals improve their credit. You can learn all the basics to start a credit repair business that takes off by reading this book by credit repair expert Daniel Rosen.