Avoid Common Mistakes Most Credit Repair Companies Make
Your goal for your business should be to run a profitable business with as little compliance and regulatory issues as possible. To insure you run a clean business and don’t run into any issues with your customers or the FTC, insure you avoid these common mistakes that many credit improvement companies make:
False Claims and Deceptive Advertising
You see it time and time again. Companies over-hyping their service by guaranteeing results and deletions and claiming a specific score increase. In this business, all you can talk about is the average results you’ve received for clients, and under no circumstances should you forecast what kind of results you will get for the client.
Charging in Advance
Unless you are exempt, CROA prohibits charging for any service until such service has been fully performed. This means that whatever service you are providing, you may not charge until said service is fully completed. If you charge $199 for an initial audit/analysis fee, then you better make sure you have completed 100% of what you defined your audit/analysis as in your contract.
Hard Pressure Sales
In the credit repair business, consumers have 3 days, per Federal Law, to change their mind about your service … some states increase that to 5. This one fact alone prevents “impulse” or hard pressure sales and allows consumers with “buyer’s remorse” the ability to attain a full refund. Educate the consumer on what your services can do for them and schedule a closing follow up.
Credit repair is a product they need, they know that, they’ve tried to borrow money, or buy a house or car … and couldn’t. This doesn’t create the ideal initial pitch energy … “Let’s talk about your bad credit Mr. & Mrs. Client.” I provide all new accounts with a great script to get started with for consumer sales.
Poor Client Support
A professional credit repair company should make sure the telephone is answered during regular business hours. Client support to be PARAMOUNT and is almost as important as the initial sale. Find out what their issue or question is and resolve it. If they wish to cancel find out why … if they have only been through two rounds, and there were multiple removals in the previous round, explain to them that they could still benefit from the service.
The average client will need to go through about 5-6 rounds to maximize the potential of credit repair. While we all know we work very fast in getting the correspondence to the bureaus, the waiting for them to respond is where a majority of the time goes. Document all conversations in your DisputeSuite.com system.
Failing to Include Federal Disclosures
Make sure you have a consumer contract with all the disclosures that the Credit Repair Organizations Act (CROA) requires. Some states will require you to add additional information to your contract as well so please be wary of that. We highly recommend you purchase a template contract, from DisputeSuite, that is completely compliant (always have an attorney review it) or have an attorney review yours or draft one for you. CROA requires you to keep a copy of the contract on file for two years from the date of the clients’ signature.
Failing to Set Realistic Expectations of Clients
Under promise and over deliver. Make sure your clients have a realistic expectation of the credit repair process or you will be dealing with a lot of headaches from clients expecting too much. Stress to your clients that you cannot guarantee deletions or score increases … that it comes down to the law and whether or not the negative item is accurate and verifiable.
Get NACSO Certified! This is imperative as it will educate you and your staff on the laws of compliance … the Credit Repair Organizations Act. Not only will this help prevent your team from inadvertently violating any laws, but it will also add professionalism and credibility to your company.
Using the Same Template Letters Over & Over
Some companies write one set of letters, or found some online, or were given to them by a “guru.” There are no special letters that can make a late payment disappear. While it’s a great idea to begin with a template letter to start, you will want to make sure you are customizing them accordingly and not sending repeat correspondence. Effective credit repair is using your knowledge of the law to properly draft custom dispute correspondence, on the consumer’s behalf, to prove their negative items are not accurate and/or verifiable. If you need help with this you can let our experts handle it.