How To Start A Credit Repair Business

by | Jun 9, 2020 | Personal Finance, Starting a Business

If you’re looking to start a home-based business and have a good understanding of how credit scores work, then maybe you could get into the credit repair business.  It’s estimated that nearly 30 percent of Americans have “bad” or “poor” credit scores and could benefit by seeking out assistance in cleaning up their credit history.  If that sounds like a service that you could perform for others, then here’s what you need to know about how to start a credit repair business from home that can actually help people.

how to start a credit repair business

What Do Credit Repair Businesses Do?

A credit repair company is a service that helps people fix their credit reports.  They will do all the heavy lifting for their clients of filtering through their credit reports, identifying the issues, and then contacting the bureaus or creditors to file disputes and investigations.

There could be a variety of reasons why people would need help repairing their credit.  The most prominent is that they would like to make a big purchase (like a home or car) but are unable to secure a loan due to years of poor financial habits.  Another might be that their identities were stolen and someone has made a mess of their credit history.

Credit repair companies are different from counseling agencies.  Counseling agencies are usually non-profit and offer their services for free.  A credit repair company, on the other hand, is a for-profit business and will charge a fee.  The average credit repair business charges anywhere from $50 to $130 per month (depending on the level of complexity).

Why Start A Credit Repair Business?

One big benefit of running a credit repair business is that it’s a job that can be done from your home.  You need little more than a telephone, laptop, and printer to actively work with clients.

On a personal level, helping people to restore their credit can be very rewarding.  As their credit scores improve and they are now able to qualify for loans or get more reasonable rates, it can have a positive impact on their finances as well as overall well-being.

Laws And Licenses

Start a Credit Repair Business

Credit Repair Organizations Act

Before getting into the credit repair business, one of the first laws you need to become familiar with is the Credit Repair Organizations Act (CROA).  This is a federal law passed back in 1996 that states that credit repair companies need to advertise and work honestly with clients.  For example, you can’t promise your customers “a fresh start” because technically it is not possible to simply erase someone’s credit history.

The CROA also makes it illegal for a profit company to charge fees before performing any actual credit repair work.  This is to help discourage scammers who would try to take a large fee upfront and then fail to follow-through on any actionable progress.


At the federal level, there are no known licenses required to start a credit repair business.  However, some states may have their own set of local laws or regulations that need to be followed.  Have a look at their website or contact the state department to speak to someone directly.

What Are The Start-Up Costs For A Credit Repair Business?

Other than the administrative costs of having a computer, phone, and Internet connection, three of the biggest costs of opening a credit repair business will be the following:

CRM Software

Downloading credit reports, reviewing them for issues, and then writing letters to the credit bureaus is going to be incredibly tedious if you do everything manually.  Instead, most credit repair businesses will do this work faster and more efficiently by using software to automate nearly all of these tasks.

A customer relationship management (CRM) software can assist credit repair businesses to do the following:

  • Download credit reports
  • Track multiple clients
  • Bill clients
  • Dispute collections, credit inquiries, late payments, bankruptcies
  • Assist with advanced dispute strategies
  • Create custom letter templates and create bulk letters
  • Etc.

Some reputable credit repair CRM software companies include:

Surety Bonds

To protect consumers, most states will require credit repair businesses to purchase what’s known as CSO (credit service organization) bonds.  These are “surety bonds” that more or less force the credit repair company to follow all the applicable rules and regulations.  Otherwise, a claim would be filed and the CSO would be stuck having to pay back the bond.

The typical cost of a bond is 1-5 percent of the total bond value (depending on the client’s credit score).  Bond amounts will vary by location usually ranging anywhere from $25,000 to $100,000 per client.


Anytime you’re going to start a business, even if it’s from home, its recommended that you form a limited liability corporation (LLC).  LLC’s protect your personal assets by establishing you and your business as separate legal entities.  That way if someone does try to sue you for any reason at all, they can only go after the business assets and not your home or retirement savings.

Working With Credit Repair Clients

how to start a credit repair business from home

Once your business is established, the process of working with clients will go like this:

  1. Provide a free consultation.  Have a brief, no-cost meeting with the client to get an understanding of their situation and what specifically they need help with.  This would also be when you clearly explain your fee structure and even present them with the official paperwork to sign so that you can get started.
  2. Download their credit reports.  Using the CRM software we mentioned earlier, download all three of your client’s credit reports and look for errors or issues that you can work with.
  3. Freeze their credit.  Usually whenever someone is trying to repair their credit, its recommended that their access to credit be frozen.  This way no further damage can be done to reduce or hurt their score.
  4. Remove inaccurate negative information.  The most obvious and sometimes helpful way to clean up a credit report is to look for items that are incorrect such as an account that was never in your client’s name.  You could also fix any wrong addresses or personal information that might be causing issues.
  5. Dispute or negotiate other negative claims.  Sometimes you’ll have to take a more advanced approach and try to work with creditors on removing reports to collections or charge offs.  Again, the CRM software can assist in helping you generate letters and tracking your progress for each client.

How To Market Your Credit Repair Business

As a work from home business, there are several ways you can promote your credit repair business:

  1. Create a professional, business website outlining your services.
  2. Record yourself giving free advice and post it to social media or YouTube.
  3. Advertise online (through Google Adwords or social media sponsored ads).
  4. Offer occasional free services in return for client testimonials or recommendations.
  5. Offer credit repair seminars (or even webinars).
  6. Advertise in the local paper or shopping guides.
  7. Advertise in local church or community group publications.
  8. Send out flyers, brochures, business cards, or other direct mail campaigns.
  9. Place a magnetic sign on your car.
  10. Network with other local businesses that can promote your services.

Final Thoughts: How To Start A Credit Repair Business

Starting your own credit repair business takes a lot of knowledge and hard work, but it can be done! You now know how to start a credit repair business. From start up costs, to marketing, and more, there’s a lot to be accomplished. Use this guide and these steps to get your business up and running and help others repair their credit!

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<span style="font-size:12px;font-weight:500">Author</span><br><a href="" target="_self">Kevin</a>


Kevin is an ambitious entrepreneur that is obsessed with all things related to finance. From a young age, Kevin has always been involved with side hustles ranging from online selling to freelance work. Over the years, Kevin graduated from side hustles and started launching multiple online and offline businesses. Kevin is a serial entrepreneur who loves starting new businesses and exploring all things related to business and finance. He is constantly looking for new ways to save money, invest money, and create income streams.

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