How to Become a Credit Repair Specialist

Credit repair specialists need to know about the broader world of credit before working with customers.

American consumers are carrying $976 billion in revolving debt, according to the Federal Reserve. As the economy sinks and lenders cut back on credit limits, the credit repair industry will become more important. Credit repair services work with their clients to lobby credit reporting agencies and improve credit scores. These firms employ specialists who work closely with consumers and stay aware of changes in the credit industry. You can pursue a career as a credit repair specialist by learning about personal finance, economics and applicable legislation.

Things You'll Need

• CSO license
• Service contracts

Instructions

1. Pursue a degree in finance or economics from a four-year college to get started on your credit repair career. Enroll in continuing education classes on small businesses and credit repair to build practical knowledge before your career starts.

2. Apply for certification as a credit service organization (CSO) in your state, if applicable. While a growing number of states require licensing, states like Michigan eschew licensing in favor of strict guidelines against unethical behavior for credit service specialists (see Resources below).

3. Protect your clients from financial losses due to your advice by taking out a surety bond. This bond requires a monthly premium from your business to keep clients safe from serious financial harm due to broken contracts. Your state's department of consumer affairs will have minimum bond limits for CSOs that need to be met before licenses are distributed (see Resources below).

4. Research the application and complaint procedures from the major reporting agencies in the United States. Equifax, Experian and Trans Union are three agencies that receive the greatest attention but delve deeper into specialty agencies used by mortgage and institutional lenders. Develop form letters for complaints to every agency to aid efforts to expunge bad marks from credit reports.

5. Produce your own contract for credit repair services that meets state and federal standards. Your contract should outline the consulting fees, repayment schedules as well as an accounting of exact services provided for your office.

6. Contact local and national chain banks in your community to determine lending tools that can help your clients repair their credit. Ask about low-interest loans for homes, commercial properties and credit cards that are applicable to your target demographic.

7. Start your career as a credit career specialist in partnership with an accountant or financial planner. This partnership allows you to handle one-on-one contact with consumers while your partner can handle relations with lenders and balance your company's budget.

Tips & Warnings

• Expand your credit repair services by acquiring CSO licenses in neighboring states. Research CSO applications, fees and requirements in surrounding states early in your career to create a long-term business plan. Stay tuned to proposed laws and amendments in the state legislature as well as Congress regarding credit service organizations. If legislation like the Credit Repair Organizations Act is changed, inform your clients about how changes to applications and credit reports will effect their files (see Resources below).

• Adhere to a stricter code of ethics than state laws and industry organizations have established. Destroy unnecessary documents with identifying information on clients, keep confidential documents in fireproof safes and meet with clients in secured areas to avoid identity theft.

Resources

• Federal Trade Commission copy of the Credit Repair Organizations Act
• State of Michigan statement on credit repair licensing
• California Department of Consumer Affairs