From 2007 through 2009, an untold number of Americans began to experience financial problems due in part to excessive spending, mortgage-rate resets, job loss and plunging home values. Mounting home foreclosures and a surge of personal bankruptcies wreaked havoc on many consumers, while others struggled to repair their credit in hopes of refinancing their homes or holding off anxious bill collectors. You may have experienced some of these same problems or perhaps you're in an enviable position: weathering the crisis and ready to establish a credit repair business.
- According to the Federal Trade Commission (FTC), consumers can perform many of the steps needed to initiate credit repair. Credit repair is designed to help improve your credit score and remove negative information from your credit reports. By sending dispute letters to creditors and asking that inaccurate information be removed from your credit report, you improve your credit score. Credit scores are used by creditors when deciding whom to lend to, how much, at what interest rate and for how long.
- For consumers who need additional help, many will turn to a credit repair business for assistance.
You can start your own credit repair business by simply establishing a business in your state according to guidelines set forth by your state's secretary of state. Visit your state's website for related information including licensing, business formation, taxation and work-from-home procedures if you plan to base your business at home. Your state may have restrictions on the terminology you use. For example, you may not be able to use the term "financial planner" if you don't have the required training and licensing.
Beyond the state requirements, you need to assess your skills. Do you have a good understanding of credit procedures and credit laws? Are you familiar with how a credit report works and how a credit score determines creditworthiness? Do you have a business, accounting or related degree which can support your claims as a credit-repair pro fessional? Do you enjoy working with people and helping them solve their financial problems? - There are plenty of out-of-the-box credit-repair business programs touted for sale online. Some make claims which may not be substantiated, while others may offer guidance to you that you can easily find elsewhere and for less money. Consider meeting with someone who already owns a credit-repair business to learn what steps she took to establish the business.
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