Many people are looking for Plan B, a second income source, or want to make a career change. In doing so it would be wise to work within an industry that is not only strong during good economic times but also when the economy slows, which happens every ten to twelve years typically. Further, you’ll want a large market and a need for your services within that market. If you are looking for information on how to start a credit repair business in Michigan, you are on the right track.
3 Key Points About Starting a Credit Repair Business in Michigan
How Big is the Credit Repair Market in Michigan
Michigan is the 10th most populated state with just under 10 million people as of the 2019 estimates.
On average, 30% of the population has a credit score below 601.
In Michigan, that represents nearly 3 million people that cannot qualify for a conventional mortgage. Add to that the number of people that have no credit score and need to build credit. Additionally, there are people above 601 that want to increase their credit score to get a better interest rate on loans they can qualify for. And the average credit card debt in Michigan is $5,622
The conclusion is that there is a substantial market in Michigan of people that need credit repair.
Federal Credit Repair Business Laws and Credit Repair Business Laws in Michigan
The Federal Credit Repair Organizations Act
The Credit Repair Organizations Act (CROA) is the federal law regulating credit repair businesses. A summary of CROA for your purposes while researching how to start a credit repair business:
- Credit repair companies cannot make false statements about a consumer’s credit score or creditworthiness to anyone including the credit bureaus, creditors, lenders, or consumers.
- Credit repair companies cannot alter a consumer’s identity (or tell consumers to do it) in order to hide negative information and/or create a new credit identity.
- Companies in the credit repair industry cannot make untrue or misleading claims about the services they provide or make promises of achieving a particular credit score on behalf of a client.
- Credit repair companies cannot charge fees before services are rendered to the client.
All of these must be adhered to but the one that is of particular importance when contemplating starting a credit repair business is not being able to charge before services are rendered. When creating a business plan for a credit repair business this must be taken into consideration with regard to cash flow.
Credit Repair Laws in Michigan
Michigan, like most states, follows the guidelines of CROA as stated above. Michigan also has a law of its own regulating credit repair businesses within the state called the Credit Services Protection Act.
The state of Michigan does not require a surety bond. But that isn’t the good news you might think it is. Typically, when a state requires a bond, that bond allows credit repair businesses to then charge fees upfront before services are rendered. Because there is no bond requirement in Michigan, there is no way to be able to charge fees before services are rendered unless the credit repair service is exempt from the federal CROA law (see above). Only banks, credit unions, attorneys, and 501(C)3 organizations are exempt from CROA.
The Michigan Credit Services Protection Act
445.1823 Prohibited conduct. Sec. 3.
(b) Charge a buyer or receive from a buyer of services money or other valuable consideration before completing performance of all services the credit services organization has agreed to perform for the buyer.
Disclaimer- The information contained herein regarding federal and state credit repair organization laws should not be construed as legal advice. We attempt to provide accurate information as of the date it is published to assist you in starting a credit repair business. However, laws change. It is therefore your responsibility to research the most current laws pertaining to the credit repair business. We also encourage you to seek legal advice from a licensed attorney in your state.
Choosing the Right Credit Repair Business Model – There are 2 Main Types
Researching your market and the laws in your state are important. But once you’ve done that and decided how you are going to adhere to these laws, you have another very important decision to make. You must decide what type of credit repair business model best suits you and what you’re trying to accomplish. Ironically, this is something that most people don’t research and they simply rush into starting their credit repair business. Without considering the type of business model before starting a credit repair business you may find yourself months into it and with thousands of dollars invested before you realize that you made a mistake.
Piece Your Credit Repair Business Together
When most people begin their research into how to start a credit repair business on the internet they see articles and websites from credit repair software companies such as Credit Repair Cloud, DisputeBee, TurboDispute, and more. So, naturally, they believe that they first need software. And second, that they, therefore, must work with other companies to get all the other pieces of their business in order to get it started. But what are the other pieces or services that you will need?
To accept debit and credit card payments from your clients you must have a merchant services company through which to process those transactions. The problem you will face is that credit repair is considered a high-risk industry for merchant services companies and associated banks. You can find merchant services companies to work with, but your fees will be higher. For a good summary of what you’re up against in working with a merchant services company visit Merchant Cost Consulting.
Pulling Credit Reports
Something else you’ll want to consider is how you are going to get credit reports for your clients in order to use the software you have to draft dispute letters for your clients. Credit repair software companies like Credit Repair Cloud advise that you ask your prospective client to open an account with Smart Credit or Identity IQ. And, then provide you with their login information so you can procure their credit reports. This is an additional fee to your client and a bit clumsy.
A Company Website
You’ll definitely need a website. Some software companies provide you with a platform, but you’ll need to build it or pay someone to build it for you. If you’re simply going to use it as a place to send prospective clients once you make contact with them, a small 4-page website is fine. But if you want your website to rank on Google, you’ll need to learn about Search Engine Optimization (SEO). Only by optimizing your website and adding new content with highly searched keyword phrases will you be able to be seen on page one or two of Google. And typically you will only be seen for searches for credit repair in your specific town or city.
Staff to the Do the Admin work and Customer Support
Example- Credit Repair Cloud claims that a realistic goal is to obtain 300 active clients that will generate a monthly profit of $20,000. The average monthly profit of $66 per client may or may not be reasonable depending on what you’re charging these clients and all the fees you have to pay to maintain your business. However, how are you as one person going to do the following?:
- Marketing to thousands of prospective clients in order to get 300 people that enroll with you.
- Have the time to have conversations with these thousands of people and sell your services to 300 of them.
- Do all the admin work of getting credit reports from your 300 clients that had to open accounts with another company just to get you their credit report. Then draft dispute letters for these 300 people and get them off to the credit bureaus.
- Provide Customer Support during business hours and take calls from up to 300 people.
It is not realistic to believe that one person can do all of this. Therefore, you’ll need staff. This will significantly cut into your profit because not only do you need to pay them, but you’ll also need to do withholding for state and federal taxes, workers comp, social security, and Medicare. Or, pay someone to do this for you. Which further cuts into your profit margin.
Even if you go through all of this, what will set you apart from all the other credit repair companies? What will you be offering that will get people to choose you?
There is a Better Business Model. Become an Independent Agent with Our Company
Just like in the insurance industry, you can become an Independent Agent with our credit repair company that has all of the business infrastructures of a credit repair business set up. Everything listed above and more is ready to go for you.
Start a Credit Repair Business in Michigan Today
The infrastructure, technology, websites, merchant services, pulling credit, and staff to process the dispute letters have been taken care of so that you can concentrate on marketing your business and selling services to prospective credit repair customers.
We even have professionally produced videos, a sales funnel system, phone apps, and marketing materials such as brochures, business cards, and templates for posting on social media. Think of the time and money you'd have to spend to produce all of this yourself? Start marketing your credit repair business on day 1!
Credit Repair Business Training
As importantly, we also train you on what you need to know about credit repair law and also how to build a credit repair business. What you’ll get in the way of training from a credit repair software company is how to use their software to generate dispute letters. That’s it! You need to learn how to build a successful credit repair business from people that have already done it. People that are highly successful in owning and operating a credit repair business.
Credit Repair Business Start-Up Cost
Credit Repair Cloud estimates the cost to start a credit repair business in Michigan to be “roughly $300”. Seeing as the lowest cost per month for Credit Repair Cloud Software is $179, they are not allocating for any of the expenses as listed above. Some have estimated the cost of starting a credit repair business by piecing everything together to be as much as $10,000.
Start a Credit Repair Business in Michigan for $288.00 and just $89/month. The $89/month is waived after you have 5 clients. If you get those 5 clients in the first month your total cost of starting your business is $288.00 with absolutely no other monthly fees.
Offer More Than Just Credit Repair
If you offer the service of removing negative items from credit reports just know that there are 81,000 other companies in the U.S. that do the exact same thing. When you are an Independent Agent with our company, you’ll offer over a dozen other services to help people build their credit score, add positive accounts, and protect their score.
Providing other services will make you more competitive in the market, get you more referrals, and get more people to choose you for their credit needs.
The Scalability of a Credit Repair Business
One last item for you to consider is the ability to scale your credit repair business. If you’re doing all the work as described above, especially if you’re starting your business on a part-time basis, how are you going to grow it? Even if you’re full time how can you do more when putting in 60 even 80 hours a week?
We have two ways that will help you grow your credit repair business so that your sales volume, revenues, and profit are unlimited!
You Can Do Business in All 50 States!
Because you’ll be representing a company that is a 501 C 3 non-profit organization which is exempt from CROA, you’ll not need to get a surety bond even in your state. But it also means you can market and have clients anywhere in the United States. Did your dream space just expand?
You Can Add Other Independent Agents!
Do you think there might be others that would want to start a credit repair business in Michigan? Instead of competing against them, why not bring them into your business as Independent Agents and get paid on their sales and company revenues? Do you know people in other states that would take a look at the credit repair business if it cost them just $288 to get started? You can scale your credit repair business exponentially by building a team of other Independent Agents.
Did We Get Your Attention?
If so, you need to know the details. Watch the video below. It’s a 30-minute video. If you don’t have the time to focus, takes notes, and write questions come back to it later. If you are serious about starting a credit repair business, you’ll take the time to do this. Then, if you like what you see, just below the video you’ll be able to book a phone appointment with an experienced and successful credit repair business owner that can answer all your questions and explain aspects of this business model in more detail.
But It Is Imperative That You Watch This Video First!
Now That You Have the Details, Book a Phone Appointment With Us
Please Note- Appointment Calendar is Set for Eastern Standard Time