Bad Credit Repair Industry in the Recession
We all know that the economy isn’t in good health now. Compared to just a few years ago, we are definitely in a rut. Latest figures from the department of statistics indicate that just over 2 million people have lost their jobs this year due to the economic slow down. Leading trend companies have suggested that another 4 million jobs will be lost before any meaningful improvement in the economy will show up. This could be anywhere from 5-10 years.
The recession has made loans much harder to get and the plain facts are that most people are still experiencing a decline in their credit scores as we enter different and deeper phases of the recession. Credit card companies spooked by the credit crisis would often pull back on credit limits, that combined with people holding on to debt longer and holding generally more debt than before causes this drop in credit scores.
With the majority of people experiencing a reduction in their credit scores, there are actually a huge amount of people that are falling into the “bad credit” group. Due to this, there is actually opportunity in this problem. It is actually a very promising market for companies that deal with bad credit repair jobs. Reports from industry followers suggest that there are a very respectable 70 million people in America that have a bad credit history and might need professional help to sort out. At this current them there are very few industries that have as bright a future.
Strangely, this industry is still very much under the radar of most entrepreneurs that there really hasn’t been much change in the number of bad credit repair agencies around. This is evidenced from the department of statistics license issuance. For all purposes, this business opportunity is still a fairly open field. The money is also very good, most bad credit repair agencies will charge between $800 and $1200 for an average bad credit repair job with complicated jobs going up to $2000 per job. A well trained team of 4-5 number crunchers together with 2 managers should be able to cover at least 50 files a month, netting you an average of an conservative $40,000 per month.
If you are willing to invest in some extra kit for your bad credit repair business you can significantly increase your client base while keeping your employees to a minimum. You can invest in things like websites, automated answering machines, auto-responders etc which can significantly cut down on inefficiencies. You can even obtain computer based macro software which can make the whole process from customer verification to report writing a much simpler process. There are numerous products on the market that can easily achieve this but the prices are normally quite steep. For the smooth running of a business these packages are often a necessary expense which will payback for itself over time.
When it comes to marketing and getting your first clients, you should never underestimate the value of old media and old forms of marketing. For important things like bad credit repair clients will often turn to classic media and also trust in it more. These classic media ads should be on radio, newspapers or even direct mail if you already have a customer base. With these classic media marketing campaigns your cost of sale will be around $200 per new client. Whatever you make above that is pure profit to your company. A well sorted classic campaign will see a lead ratio of about 2-4%
As with any service industry, the relationship that you build with your client is very important. When you are scaling up your business you must never forget to have that personal touch with your clients. Often times that is the only thing that will set you apart from other cold large institutionalized bad credit repair providers. Current customers are much better for selling “upstream” as there is a high chance that they will also need other financial services or professional advice. Smart business operators will cultivate a good standing long term relationship with associated businesses that can provide referral business. These related businesses include lawyers, bankers, brokers, real estate agents and other professionals who can refer their customers to you.
We feel that the amount of entrepreneur participation in the bad credit repair market is simply too low at the moment. When you factor in the amount of money that you can potentially make it seems ludicrous to not invest in this sunshine industry. We can only see the general public getting their credit scores lower over the coming years. Investing in and industry as bright as this would certainly bare fruit sooner than later.
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