Critical Moves While Disputing Credit Marks From a Credit Expert

Most people don’t wake up in the morning thinking they will need credit repair someday. But, then, life happens. Unforeseen hospital bills, stolen identities, or other emergencies that impact personal budgeting plans and overall financial wellbeing can pop up — even for those who think they will never have an issue with credit in their lives. And when these unfortunate challenges present themselves, victims desperately need help to get their finances back on track.

Credit repair business owners are regular people helping others get their lives on track through their knowledge of the credit system. Pictured here are three of our Credit Repair Expo 2019 attendees.

That’s where credit repair specialists can step in and throw people a lifeline during times of crisis. To help their clients get back on their feet, credit repair specialists must devise a comprehensive credit repair strategy. This starts with an initial assessment of a client’s situation and eventually entails sending dispute letters to credit bureaus to point out credit report inaccuracies and petition for them to be removed.

Learn how credit repair specialist, Derrick Harper, develops his comprehensive credit repair strategy as well as dispute letter techniques he uses to help his clients face and overcome life-altering credit problems.

1. Learn to Think Like an Expert

Can you quickly rattle off the components that determine a person’s credit score? Do you know how income plays a role in a credit score? Did you know that a credit score only determines your interest rate, while other factors decide whether or not you’re approved or denied for a loan?

As a credit repair specialist, the breakdown of credit and all of its intricacies should come as naturally as the air you breathe.

If you don’t know the answer to these questions yet, take time to do initial research about the credit repair industry. Successful credit repair business owner Derrick strongly believes that the more educated you are about the credit repair industry, the more helpful you can be to your clients. As you start a credit repair business, you’ll need to understand how credit bureaus view debt and assess risk so you can understand how to correct your client’s shortcomings. Work your way toward becoming a credit expert, one day at a time.

To determine how your clients handle debt, you'll also need to look at your clients through the same lens that a credit bureau would. Viewing clients from this perspective will help you better understand what you need to do to help your clients get their financial power back.

2. Understand Where You Can Assist

If you’re just starting a credit repair business, you might not realize that while credit repair specialists can educate clients about all five components of a credit score, it’s only possible for credit repair specialists to take physical action on one of them: payment history, which is worth 35% of an overall credit score.

When working with clients, Derrick breaks down the payment history segment of a credit score in the following ways, and details specifically which factors play a role in improving or lowering the score:

• Collections: If a debt has not been paid on time, it is subject to collections. Bills paid 30-60 days late are considered minor delinquencies, whereas anything beyond 90-days late is a key derogatory and needs to be handled as a first priority.
• Charge-offs: If a credit card debt has not been paid for several months in a row (usually six) a creditor will write the debt off as a loss on their books, and cancel the open account, but will still demand payment for the past due balance.
• Revolving credit: The amount of credit a lender offers a borrower month-over-month is a credit line. The borrower can use as much — or as little — of that credit line as he or she would like, but at the end of each month, the balance must be addressed. If the balance isn’t paid off entirely, the borrower is required to pay interest on the remainder or the revolving portion of the debt.
• Installment loans: If you have an auto loan or a mortgage, you likely pay an installment payment, which is a lump sum a lender requires you to pay each month until the loan is fully paid. For instance, if you have a 48-month auto loan, you will pay an installment loan payment, every month, for 48 months, or until the loan is paid off.

After understanding which components of a payment history your client is on the hook for, and how much it can lower his or her overall credit score, you can audit your client’s specific credit situation to see which segment needs the most urgent attention.

3. Create a Customized Plan

Credit repair isn’t a one-size-fits-all solution. As a credit repair company, part of your heroic efforts boils down to finding the best solution for an individual client, which requires an individual assessment.

Derrick and his team rely on Credit Repair Cloud’s Simple Audit tool to analyze a client’s credit score and pinpoint the areas dragging his client’s score down. He then creates a customized solution to chart his course for getting his client back to a healthy score. This game plan requires a mixture of education and action.

For example, if one of Derrick’s clients has outstanding debt, late payments, and a key derogatory mark, he can start to categorize which factor is impacting his or her score the most, and take action accordingly. In this scenario, Derrick would tackle the key derogatory mark first, because if left unattended, it would leave the most considerable mark on his client’s overall credit score. Derrick may also set up a more extensive prioritization list to help his client understand the best way to tackle bills that are indisputable.

Confronting the biggest red flags first helps get your credit repair clients back on the path of financial freedom faster.

4. Set Expectations to Create a Partnership

Even though the credit repair specialist will bear the brunt of the labor during the credit rebounding process, your clients also need to make positive strides to ensure you’re working toward a mutual goal.

Derrick says that on average, credit repair client relationships will last five months. To make your partnership a productive one, Derrick recommends setting ground rules. For example, his team requires all new clients to get a secured credit card as the first order of business. This action allows Derrick to:

• Confirm the new client is vested in the process
• Be more useful for his clients

Time isn’t on your side when dealing with clients with derogatory marks, and you need to ensure they always have a score registered as you go through the dispute process. Otherwise, you aren’t able to do your job as a credit repair specialist and business owner.

A secured credit card is one way to make sure your client’s score will register. It will also ensure they are making positive strides toward improving their score, right alongside the work you’re doing to help.

5. Find Low-Hanging Fruit

Many new credit repair business owners start blindly submitting dispute letters and then quickly discover they’ve dug themselves into a hole. This poorly planned strategy can actually worsen your client’s credit score or create unnecessary hurdles for you to jump over because you’re locking up, or reopening the statute of limitations for all accounts too quickly.

Instead, “keep it simple,” Derrick recommends. It’s not about working the hardest, it’s about working smart to see results for your efforts.

Are there other factors that play a role in your client’s poor credit score that can turn into a quick win? For example:

• Is there a credit card on which your client has spent higher than their limit? Can he or she make an immediate payment on it?
• After you’ve performed a simple audit, can you find one mistake on the report to leverage?
• Are there key derogatory marks that you can start paying down?

Sometimes making improvements to your client’s credit score doesn’t start as a dispute letter, it begins with reeducation on debt management. Reeducation can help your clients overcome credit issues for the rest of their lives.

6. Zero in on Dispute Letters

After addressing the low-hanging fruit, you are ready to start looking into dispute letters, and which type of dispute letter is best for your clients. To do this, Derrick and his team leverage Credit Repair Cloud’s automated system to ensure he delivers the right message to the right source.

There are several types of dispute letters:

• Letters to a credit bureau
• Letters to a creditor or collection agency
• Goodwill adjustment letters

Derrick and his team are deliberate in their dispute letter approach, rather than sending 100 letters at a time, they take a staggered approach, which has resulted in an 87% success rate with removals from his team. Derrick recommends sending an initial batch of five dispute letters, then reassessing to see if the disputes are successful, before sending the next batch.

A more methodical approach to dispute letters helps ensure your team isn’t working harder, just smarter.

7. Go Above and Beyond

Though payment history is the only credit score component credit repair specialists can directly address, you can go above and beyond for your clients and provide additional support and tools to help your clients create better financial habits.

Derrick and his team use their credit repair software for automatic recurring credit pulls to keep them notified on their client’s financial activity. If the team sees a new red flag, they can reach out to their client and explain how to make improvements. Derrick says when his team sees a good payment history streak they call their clients to praise them. And, if his clients fall back into bad habits, his team educates them on ways to improve so that both Derrick’s team and the client are always working together to get the best credit outcome possible.

Credit repair requires a partnership with your clients, but it also requires ongoing support and education, even after the initial plan is put into place.

If you’re ready to start helping people through credit repair, get Credit Repair Cloud’s free trial today. We can help you provide the best credit repair possible for your clients, and make it easy for you to open and manage your own business.