Do you want to start a credit repair agency but want to go for a unique niche? If YES, here are 12 best credit repair business ideas & opportunities for 2020.
Credit repair service is all about helping individuals and small businesses handle their credit issues so as to improve their credit ratings, and there are loads of business ideas that one can build around the credit repair industry. As a matter of fact, any business that helps you manage your finance will ultimately help you improve your credit ratings.
Credit repair companies help their clients identify errors in their credit reporting and they go ahead to help dispute the inaccurate information with the credit reporting agencies involved. These services can be offered in person, online or over the phone, usually for a fee. On the average, their advice relates to credit cards, personal loans and home mortgages. These services are typically undertaken on behalf of a client who has known credit problems, such as a recent bankruptcy.
Research conducted by IBISWORLD shows that conditions were ripe for industry growth right before the recession, with the amount of consumer debt increasing to record levels during the early 2000s. Nevertheless, the recession caused demand for credit repair to increase slightly in 2009 and 2010.
Rising unemployment and falling disposable income led to an influx of debt problems for consumers during the recession, causing many households to turn to credit repair service firms for help with debt management.
If you have the requisite experience and perhaps qualifications and you are interested in starting a business in the credit repair industry, then here are the 12 best business ideas in the credit repair industry for 2019 that you can choose from.
12 Best Credit Repair Business ideas & Opportunities for 2020
- Credit Repair Services Firm
One of the business opportunities that you can start in the credit repair industry is a credit repair services business. Although you need ample hands-on experience and good track record to be able to attract well-paying clients, but that does not stop you from still making headway in this line of business. The truth is that the business has pretty low entry capital and you can start the business from your home, shared office space or virtual office with one or two staff members.
Another profitable business idea in the credit repair industry that an aspiring entrepreneur can start is debt collection agency. Debt collection agency is an agency that pursues payments on debts owed by individuals and businesses.
Most collection agencies operate as agents of creditors and render their services for a fee or a percentage of the total amount owed. Other agencies purchase debt portfolios from creditors at a discount and then pursue outstanding balances for their own gain.
- Judgement Recovery Agency
Judgment recovery agency is yet another credit repair industry related business idea that an aspiring entrepreneur should consider starting if they are interested in the industry. The judgment recovery professional “takes assignment” on judgments before he or she enforces them.
That means that the judgment is actually transferred into the judgment recovery professional’s name, usually through the same method by which any considerable asset, such as real property, is lawfully transferred. From this point onward, the judgment recovery professional is the new creditor, and is thereby standing in the original creditor’s shoes.
As soon as the judgment recovery professional has “taken assignment,” he or she can then perform all the operations they are streamlined for: pulling credit reports, conducting investigations, bringing the debtor back into court for extensive examination, seizing property, putting liens on homes, garnishing wages, and so on.
If you are interested in starting a credit repair industry related business, then one of your options is to start a payday loan and check cashing services firm. Payday loan and check cashing firms offer payday loans, installment loans and other related financial services.
They may also cash checks, drafts or money orders for the general public. It is important to state that banks and firms that operate exclusively online are not part of the Payday Loan and Check Cashing industry. The industry has loads of small business operators servicing a wide range of clients.
Another credit repair related business that anyone interested in starting a business in the credit repair industry should consider is a factoring company. The term factoring simply means a short-term financing option to increase a business’ liquidity. Operators also purchase accounts receivable and unpaid invoices at a discount in return for immediate receipt of money.
Factoring involves a company selling its accounts receivables or invoices to a third party as a means of accessing cash to finance further business activity without having to wait for their debtors to pay them. Factoring companies generate revenue through factor fees, or the difference between the price paid for the invoice and money received from debtors.
Starting a credit and debt counseling business is yet another good business idea in the credit repair industry that an aspiring entrepreneur should consider starting. There are loads of areas a trained counselor can specialized in and one of them is in credit and debt counseling.
It is no longer news that in most developed countries, the demand for counselors that are specialized in credit and debt counseling it’s on the increase and they are indeed smiling to the bank, no thanks to the recent global economic crunch that affected most people.
It is important to state that much more than being a trained and certified counselor; you would also require a training and certification in finance (money management) to be able to practice as a credit and debt counselor. Although in some countries in the world, credit and debt counseling is mostly offered by NGOs, but if you choose to start a business in this regard, you will definitely have enough clients to handle per time.
As an aspiring entrepreneur with vast experience in the financial industry, one of the related business opportunities in the credit repair industry that you can leverage on is to start a credit card processing business. Although you need ample hands-on experience with good track record to be able to attract well – paying clients, but that does not stop you from still making headway in this line of business.
Please note that starting a credit card processing business can be demanding and risky at the same time, but if you have done your due diligence before venturing into the business, you are likely not going to run at a loss. First and foremost, you are expected to have experience in the financial industry. It will pay you to study accountancy or banking and finance if indeed you want to venture into this line of business.
Another interesting business idea in the credit repair industry that an aspiring entrepreneur should consider starting is a financial coaching firm or financial planning and advice firm. Financial coaching firm is under the financial planning & advice industry and establishments in this industry provide financial planning, financial advice and wealth management to individuals and business clients.
Financial coaches also offer advice, in conjunction with other activities such as portfolio management, protection planning and brokerage services.
Please note that the financial planning & advice industry does not include mutual fund companies, hedge funds, discount brokers, insurance brokers or other companies that deliver these services, outside the context of a written financial plan.
- Credit Reporting Services Firm
Staring a credit reporting firm is yet another interesting business idea in the credit repair industry that an aspiring entrepreneur should consider starting. Credit reporting services firm helps in monitoring and reporting any debtor or creditor who is not ready to play by the book to the regulating authority. In order to do well in this line of business, you must work as an investigator to be able to get the details needed to indict an offender.
Another good business idea in the credit repair industry that an aspiring entrepreneur should consider starting is a repossession services firm. Repossession services firm basically engage in helping their clients repossess assets from debtors who are defaulters and are unwilling to fulfill their own part of the bargain.
- Collection and Debt Portfolios Manager
Starting a collection and debt portfolios managing business is no doubt one of the good business ideas in the credit repair industry that an aspiring entrepreneur with the required qualification and experience can successfully start. The services offered by collection and debt portfolio managers is simple and straightforward; they help their clients in collecting payments from debtors and also help their clients in managing their debt portfolios.
- Dispute Settlement Firm
Another good business idea in the credit repair industry for 2019 that an aspiring entrepreneur can successfully start and do pretty well in is dispute settlement firm. Dispute settlement firms help in settling disputes between creditors and debtors especially if they don’t want to take the case to court.