How To Start a Credit Repair 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 industry. 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 offering credit repair services from home that can 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 by filtering through their credit reports, identifying the issues, and contacting the bureaus or creditors to file disputes and investigations.

There could be various 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 cannot secure a loan due to years of poor financial habits. Another might be that their identities were stolen, and someone messed up their credit history.

Credit repair companies are different from counseling agencies. Counseling agencies are usually non-profit and offer their services for free. On the other hand, a credit repair company 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 significant benefit of running a credit repair business is working from home without needing office space. But, of course, it would help if you had little more than a telephone, laptop, and printer to work with clients actively.

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

Create a Credit Repair Business Plan

As a new business owner, you need to have a business plan. It maps out the specifics of the business venture and helps you discover what you need fo run a thriving and functioning business. Determine the following:

  1. Startup costs and ways to save money by reducing the business expenses
  2. The day-to-day operations
  3. Where to find new clients (target market)
  4. How much to charge customers
  5. The business name

Laws and Licenses

Start a Credit Repair Business

Credit Repair Organizations Act

Acquaint yourself with credit repair laws 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). It is a federal law passed back in 1996, and it states that credit repair companies need to advertise and work honestly with clients. So, for example, you can’t promise your customers “a fresh start” because, technically, it is impossible to erase someone’s credit history.

The Credit Repair Organization Act also makes it illegal for a credit reporting agency to charge fees before performing any actual credit repair work. This is to help discourage scammers who would try to take a hefty fee upfront and then fail to follow through on any actionable progress. Also, there must be a written contract, and the client can cancel at any time.


No known business license is required to start a credit repair business at the federal level. However, some states may have their own set of local laws or regulations that need to be followed. So look at their website or contact the state department to speak to someone directly to see if you can repair credit in your state.

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 highest 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 will be incredibly tedious if you do everything manually. Instead, most credit repair businesses will do this faster and more efficiently by using credit repair software to automate nearly all of these tasks.

A business credit repair software simplifies adding clients, importing credit reports, nd conducting credit report audits. Additionally, customer relationship management (CRM) software can improves the credit repair process and helps 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

Most states will require credit repair businesses to purchase what’s known as CSO (credit service organization) bonds to protect consumers. These are “surety bonds” that more or less force the credit repair company to follow all the applicable rules and regulations. Otherwise, the client may file a claim, 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). The credit repair surety bond amount varies by location, ranging anywhere from $25,000 to $100,000 per client.


Anytime you start a business, even if it’s from home, figure out the business structure. We recommend that you form a limited liability corporation (LLC). LLCs protect your personal assets by establishing you and your business as separate legal entities.

That way, if someone tries to sue you for any reason, they can only go after the business assets and not your home or retirement savings. This is why you should have a merchant account (it is a type of business bank account).

Aside from separating your personal finance from the business financial assets, a business bank account makes tax filing easy. First, ensure you apply for an Employer Identification Number (EIN) to register for taxes. A tax professional or tax attorney can help with the entire process.

Working With Credit Repair Clients

how to start a credit repair business from home

Once you’ve established your home credit repair business, 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 business credit repair software we mentioned earlier, download all 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 track 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 to your target market:

  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, social media sponsored ads, or email marketing).
  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 and build affiliate relationships.

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 create a credit repair business. There’s a lot to be accomplished, from start-up costs to marketing and more. Use this guide and these steps to get your business up and running and help others repair their bad credit!

DJ Whiteside

DJ Whiteside is a financial enthusiast who believes in helping other people to achieve financial independence. He’s constantly looking for practical ways to optimize savings, reduce spending, and create a lifetime of passive income. DJ holds an MBA from the University of Michigan, which allows him to take an analytical approach to financial topics. He has been a financial writer since 2011 and has self-published 5 personal finance eBooks relating to saving, retirement, and financial independence.

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