How to Start a Credit Repair Agency

Credit repair agencies assist consumers in repairing their credit and increasing their credit scores. They educate clients regarding their credit details and manage disputes on their behalf through communication with lenders, collection agencies, and credit bureaus.

Learn how to start your own Credit Repair Agency and whether it is the right fit for you.

Ready to form your LLC? Check out the Top LLC Formation Services.

Start a Credit Repair Agency by following these 10 steps:

  1. Plan your Credit Repair Agency
  2. Form your Credit Repair Agency into a Legal Entity
  3. Register your Credit Repair Agency for Taxes
  4. Open a Business Bank Account & Credit Card
  5. Set up Accounting for your Credit Repair Agency
  6. Get the Necessary Permits & Licenses for your Credit Repair Agency
  7. Get Credit Repair Agency Insurance
  8. Define your Credit Repair Agency Brand
  9. Create your Credit Repair Agency Website
  10. Set up your Business Phone System

We have put together this simple guide to starting your Credit Repair Agency. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

Want some help naming your Credit Repair Agency?

Business Name Generator

What are the costs involved in opening a Credit Repair Agency?

Startup credit repair agency costs are fairly minimal, averaging $10,000 in total costs. Since the majority of your work will take place online, you don’t need to secure office space. Your home office should be equipped with a computer and monitor, a dedicated phone line, and internet.

Most states require that all credit repair agencies obtain a surety bond. This bond protects clients against any potential damages, up to the bond’s limits, and cost between $200 and $300.

A merchant account is required for any functioning business that wishes to accept debit and credit card payments. Most banks, however, are unwilling to accept the risks associated with credit repair agencies. Conduct thorough research and partner with a credit repair merchant service that understands and can support your business needs.

While not required, investment in credit repair software is recommended and represents your biggest out-of-pocket expense. Software costs range anywhere from $179 to $900 a month, tempting many entrepreneurs to forego this expense. Industry leaders advise against this; however, reporting a 400% increase in revenue in just over a year.

Business owners desiring the backing and expertise of established organizations should consider purchasing a credit repair franchise. Franchise fees range from $9,500 to $15,000 and provide you with all the tools you need to get started.

What are the ongoing expenses for a Credit Repair Agency?

Ongoing expenses for your agency will be similar to startup costs. In addition to the standard overhead costs, your budget should include credit repair software fees, insurance, surety bond, and payroll. Entrepreneurs with long-term growth and success goals are encouraged to include ongoing education in their monthly expense budget.

Who is the target market?

At first glance, one would think that your target market includes any individual with a negative credit history. Research indicates, however, that consumers under age 24 and over 65 either have a sound credit score or are not concerned with taking the necessary steps to repair their score. Your marketing efforts should be more direct, targeting consumers over the age of 25 or who have recently been turned down for a loan.

How does a Credit Repair Agency make money?

While most actions required to increase one’s credit can be done by the consumer, many are unfamiliar with and intimidated by the process. They look to credit repair agencies to educate them regarding their unique situation and to represent them throughout the dispute and repair process. Agencies charge a subscription fee, flat fee, or charge per deletion.

How much can you charge customers?

When developing your business plan, carefully research competitor pricing and fee structures, as well as your cost per acquisition. Larger, established organizations charge $90 to $125 per month while others charge a fee for each dispute they successfully settle. Industry leaders encourage new agencies to remain flexible, restructuring their pricing as the need arises.

How much profit can a Credit Repair Agency make?

Annual profit is directly tied to your fee structure and the number of clients you service every month. If you assist 200 clients who each pay $89 a month, that equals $17,800 in monthly revenue. If you reach $500 clients, you will earn a monthly recurring revenue of $44,500.

How can you make your business more profitable?

Agency owners looking to maximize profits will need to have a strong, targeted marketing strategy, hiring additional repair professionals to the team as the company begins to grow.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your Credit Repair Agency is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website. If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

  • Separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

  • Separate personal and business expenses by putting your business' expenses all in one place.
  • Build your company's credit history, which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a Credit Repair Business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended: Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker.

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a Credit Repair Agency

As with any profession, networking within your industry ensures a solid foundation for your business. Startups are encouraged to partner with other financial services professionals, including car dealers, mortgage brokers, other lenders, attorneys, and CPAs. Advertising campaigns should remain professional, targeted, and position you as an expert in your field.

How to keep customers coming back

In addition to fostering professional relationships and developing a referral program, agency owners must treat every customer as they would want to be treated. If your customers walk away with a positive and successful experience, they will spread the word.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business.

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

  • All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
  • Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
  • Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.

Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

Your work as a credit repair agent will significantly impact your clients’ lives for many years to come. Therefore, those considering this business venture should be prepared to commit to the well-being of each customer as well as maintaining a masterful knowledge of the industry, its governing rules, and regulations.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a Credit Repair Agency?

While the specifics will vary depending upon each client’s needs, your duties as a credit repair agent will be similar from day to day:

  • Onboarding new clients
  • Providing customer service - answering questions and keeping clients informed of all progress
  • Analyzing their unique credit situation
  • Entering details into credit repair software
  • Generating and forwarding dispute letters

What are some skills and experiences that will help you build a successful Credit Repair Agency?

While this industry is poised for significant annual growth, it is important to remember that many organizations fail to deliver what they are hired to do. Therefore, it is critical that startup business owners have a well-thought-out marketing strategy that establishes themselves as leaders in the industry. Most of your clients will come to you frustrated and ambivalent; it is your job to reassure and educate them regarding the credit repair process. Strong communication and listening skills and extensive knowledge regarding credit repair will be the cornerstone of your agency’s long-term success and growth.

Agents should be committed to learning as much as they can about the industry and should remain abreast of the latest rules and regulations. Networking, attending conferences, and subscribing to relevant blogs will help you position yourself as an industry leader.

What is the growth potential for a Credit Repair Agency?

This industry has experienced steady growth year after year, with projected market revenue of over $15 billion by 2025. Agency owners possessing drive, industry knowledge, and a targeted marketing strategy have the potential to realize significant annual growth

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Take the Next Step

Find a business mentor

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

  • Funding
  • Events
  • Guides
  • Support

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a Credit Repair Agency?

It’s important to remember the sensitive nature of the credit repair industry. Your clients are trusting you with their financial health and have clear, definitive goals regarding the outcome of your work. Therefore, ongoing personal education is pivotal to your success. You can accomplish this by reading relevant guides and blogs, regularly visiting relevant websites, attending training classes and events, and building relationships with other industry professionals.

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