More and more people are interested in starting a credit repair business. And, there are many companies out there selling software, websites, training certificates and more to those that want to start a credit repair business. In their advertising these companies make it sound so easy to use their products and make a lot of money. But think about it. Maybe the reason these companies are selling other people their products and are not in the credit repair business themselves is that they realize starting a credit repair business isn’t that easy. In fact, most credit restoration businesses fail in the 1st year.
It is true that about 43 million American consumers have a poor credit score. It’s also true that 4 in 5 credit reports have errors on them. And, with the criteria for lending having tightened dramatically, it would seem that people would be knocking down the door of anyone claiming to know how to solve their problem and increase their credit score. But it’s not the case.
Here are several reasons why the chances of starting a credit repair business and making it a success are not good at all unless you work with a company that provides all the infrastructure.
#1– People can live with poor credit their whole lives. Not everyone with a sub 600 credit score has the need or desire to increase their score. The only time they’ll feel the pain of a poor credit score is if and when they attempt to purchase or lease a car or get a loan for a mortgage. With regard to buying a car they’ll still be able to make that purchase albeit with a higher interest rate. The bottom line is that you have to work hard and be a savvy marketer to find clients. Then you have to be a very good salesperson to convince your prospect to do business with you especially if you’re just getting started because you have no track record.
#2– There’s a federal law called CROA. This law prevents a company that is not a 501(C)3 non-profit, attorney or bank from collecting up-front fees for credit restoration services. Yes, you can charge a nominal set up fee. Most people look at this and discount it’s affect because they wrongly assess that the monthly fees they’ll charge clients will eventually make up for it. Here’s the problem. Most people will not continue to pay monthly fees unless they see results quickly. People are impatient and want an increase in their score right away. If they don’t see it they will stop paying the monthly expense. Therefore you’ll have a cash flow problem, not see the return on your investment of time, energy and money, and likely fold within your first year. This creates more difficulty in starting a credit repair business.
#3– The days of charging thousands for credit repair are over. Ten years ago, even five years ago companies charged thousands of dollars for credit repair. Some still do but the tide is turning. Many companies like ours charge a lot less than even $1,000. Therefore the big profit margins in the industry just don’t exist. And, if you look at what you would earn per hour working on a client’s account you may as well get a part time job at a retail store and not have the headaches.
#4– There’s not enough hours in the day to build a successful credit restoration business from scratch. People severely underestimate the time it takes to promote their business, sell to clients, follow up with clients, dispute items to the credit reporting agencies, and everything else that goes along with it. This factor alone leads to most people failing in the first year.
There is however a way to start a successful credit repair business.
Work with a company that does all the back end work of analyzing credit reports, drafting dispute letters, providing customer support, and adhering to state and federal regulations. Our company does that and provides a website, an online tracking system, and training. As an Independent Agent our job is to market and sell. This frees up the hours needed. However, that’s not enough. You still have to do more sales volume than one person can do to achieve a significant income.
How do you achieve more sales volume than you can do yourself? Develop a team of Independent Agents. The fact is that no matter the business model chosen there simply isn’t enough hours in the day to make a credit restoration business work on your own. You need help. By developing a team of Independent Agents who are, in turn, building their own Agency you can develop a significant income into the tens of thousands per month. You could never do that on your own.
If your goal is to do credit restoration on the side and make very little money then go buy software and have a go at it. But if you want a long term career where you can earn a significant income and eventually stop working because you have a substantial team of Agents working for you, then contact us. The support you’ll receive will go a long way to help you in starting a credit repair business.