More and more people are interested in starting a credit repair business. There are many companies out there like Credit Repair Cloud selling software, websites, training certificates, and more. In their advertising these companies make it sound so easy to use their products and make a lot of money. But think about it. These companies are selling other people their products and are not in the credit repair business themselves. Maybe 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 poor credit scores. It’s also true that 4 in 5 credit reports have errors on them. And, criteria for lending have tightened dramatically. It would seem that people would be knocking down the door of anyone claiming to be able to increase their credit score. But it’s not the case.

Starting a credit repair business and making it a success is difficult. Here's why...

You Must Know How to Find Motivated Clients

#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. Their poor credit score only hurts them if and when they attempt to use their credit. Such as when trying to qualify for a mortgage or car loan. 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.

Unless You are Well Capitalized You Could Have a Cash Flow Problem

#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 setup fee. Most people discount its effect because they wrongly assess that the monthly fees will 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 scores right away. If they don’t see it they will stop paying the monthly expense. Therefore you’ll have a cash flow problem. You'll not see the return on your investment of time, energy, and money. And you'll likely fold within your first year. This creates more difficulty in starting a credit repair business.

You Must Price Your Services Competitively

#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. If you calculate what you earn hourly you may as well get a part-time job and not have the headaches.

You Must Wear All the Hats

#4- There are not enough hours in the day to build a successful credit restoration business from scratch. People severely underestimate the time it takes. You have to promote the business. Then sell to clients and follow up with clients. Then put in the time to 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 (you will not need to purchase credit repair business software), providing customer support, and adhering to state and federal regulations. Our company does that and provides a website, an online tracking system, and credit repair 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.

You Can Also Gain Leverage

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. Our flexible credit repair business training system will show you how.

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 then look further at our opportunity. The support you'll receive will go a long way to help you in starting a credit repair business. The video below will give you details on starting a credit repair business with us.

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This article which was originally posted in 2015 is updated regularly and was last updated in July 2023.

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ERA Credit Services and/or its partners, Advisors, or affiliates make no guarantees to the level of financial success our Independent Credit Repair Advisors can achieve. Earning substantial income with this opportunity requires hard work, leadership, and dedication and some Advisors may make no money at all. All income you receive will depend upon your individual effort and ability.