How to Set Up a Credit Repair Business

Credit repair is a low overhead business that can be set up by anyone with a solid understanding of the laws pertaining to credit and debt collection. Credit repair is a process of obtaining credit reports, verifying information and working to eliminate or resolve outstanding debt and collection issues. Far more important than a fancy office or equipment is a working knowledge of these fields, good communication skills and a sincere desire to help.

Difficulty: Moderately Challenging

Instructions

1. Learn the law. Ultimately, all the power of credit repair comes from knowing the rights of individuals and the limitations placed on creditors and debt collectors. The ability to serve your clients will depend directly on your understanding of credit and debt laws on local, state and national levels.

2. Look into franchises. Though buying into an existing franchise can dramatically increase the cost of setting up a credit repair business, it can offer instant name recognition and credibility. Some franchises will also provide education in proprietary debt repair techniques that might not otherwise be obvious. They can also provide website creation and other auxiliary services.

3. Consider incorporation. Whichever structure is chosen, the cost of incorporating is low, but it can create tax advantages for a profitable business owner. In any event, a new credit repair business will need a name, which should be checked for availability through the state's division of corporations or Secretary of State websites.

4. Advertise. Business cards can be an effective way of transforming a face-to-face contact into a paying client. In the absence of a visible office location, advertisements online, in local publications and in phone directories can help generate contacts.

5. Network. Successful businesses don't exist in isolation; they network with related businesses. For credit repair, maintaining a good relationship with local attorneys and accountants can help produce referrals in cases they choose to pass on.

Tips & Warnings

• Encourage satisfied customers to be living, breathing advertisements by creating a word-of-mouth buzz. Consider an incentive program for referrals.
• Don't overpromise. Credit repair does not happen overnight. Creating unrealistic expectations in your clients will only backfire and lead to disappointment later.

Resources

• Procedures to Start a Credit Repair Business
• 7-Step Credit Repair Business Plan
• How to Start a Credit Repair Business
• Debt Crisis Solutions

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