How to Start a Credit Restore Business

Owning a credit repair company can be challenging, but it can also be rewarding.

The Fair Credit Reporting Act affords consumers the right to dispute inaccurate, incomplete, unverifiable or outdated listings on consumer credit reports. The process of disputing negative items on credit reports is known as credit repair or credit restoration. It requires knowledge of consumer laws and credit regulations. Because of the extensive knowledge required, many consumers rely on a credit repair business. Equipped with the right knowledge and startup funds, you can start your own company in this growing industry.

Things You'll Need

• Startup funds (varies based on your state)
• Computer
• Printer
• Scanner
• Copier
• Fax machine
• Business phone line
• Database or tracking software

Instructions

Forming Your Business

1. Research the different types of businesses, including sole proprietorships and limited liability companies. You should decide which one is right for you.

2. You should decide on a company name and conduct a search with your Secretary of State's office to make sure that name has not been taken by any other business. Some Secretary of State offices charge a fee for this service. You should perform an Internet search to identify any companies with the same or similar name. Once you have reached a final decision on your company name, file the necessary forms with your Secretary of State to reserve the name.

3. Request an Employer Identification Number through the IRS website.

4. If you require a P.O. box to receive mail for your business, you would need to take a copy of your EIN statement and government-issued identification to your local post office.

5. You should file the necessary forms to incorporate your business in your state. Incorporation fees range between $120 and $500. Your Secretary of State's website should have the required forms available. The website also lists the filing fees for each document. Once you have filed the necessary forms, you must wait for the Secretary of State's approval to arrive in the mail.

6. You should arrange for business phone and fax lines. If you are operating your business from home, it may be more cost-effective to use a virtual phone or fax service such as Ring Central or MyFax.

7. You should select a bank for your business bank account. You will need your approved corporation documents from the Secretary of State along with your EIN statement, photo identification and initial deposit to open a business checking account. If you want to accept credit and debit cards, you should talk with your business banker about opening a merchant account as well.

8. You should obtain a domain name. You will also need website and email hosting. You may design your website using a template. You can also hire a professional web designer to complete this task for you.

9. You should decide on a method for keeping track of client information and disputes. You may decide to create your own databases using Microsoft Access or Excel. You may also purchase a tracking software developed specifically for credit repair businesses.

10. You should set up your office. At a minimum, you will need a computer, Internet access, printer, copier, scanner, business phone and fax machine. You will also need other basic office supplies, including paper, pens, stapler, staples and envelopes.

Know Your Business

1. You must familiarize yourself with laws and regulations that apply to consumer credit and collections. You should begin with the Credit Repair Organizations Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, Fair and Accurate Transactions Act and Health Insurance Portability and Accountability Act. You can also visit the Federal Trade Commission's website for information about credit repair.

2. You should join multiple Internet credit and collections forums. Be sure to include your company name and contact information in your forum signatures. Read through the posts to determine the most common credit problems, identify dispute strategies and stay up to date on credit bureau and collection agency behavior. You should offer advice to other forum members, if you're able to do so.

3. You should stay current on credit and collections news by reading industry websites, newspapers and magazines.

4. You should join industry associations and sign up for newsletters and updates. You should attend any training seminars or conferences you can afford.

Market Your Business

1. You should order business cards. You should leave them at local businesses and hand them out to everyone you know.

2. You should create brochures or fliers for your business. You should leave them with local businesses and put them up on community bulletin boards.

3. You should advertise your business on the Internet using services like Yellowpages.com, Google AdSense, Craigslist and affiliate marketing.

4. You should place ads in phone books, newspapers, magazines or school programs.

Tips & Warnings

• Credit repair is something anyone can do for themselves, but it takes a great deal of knowledge, skill and organization to perform credit repair for clients. You should be sure you are familiar with the process and have been successful with it in the past before you invest in a credit repair business.

• The Credit Repair Organizations Act prohibits credit repair businesses from taking large amounts of money for services up front. Be sure you are following the letter of the law with regard to taking payments from your clients.

• You should be sure you are familiar with your state's laws regarding credit repair organizations. You should make sure you follow theses laws closely.

References

• Federal Trade Commission: Credit Repair Organizations Act
• Federal Trade Commission: Fair Credit Reporting Act
• Federal Trade Commission: Fair Debt Collection Practices Act