Start a Credit Counseling Business
Business Overview:
If you’re good with budgets and enjoy helping people solve problems, you should learn how to become a debt counselor and start a credit counseling business. Regardless of the state of the economy, people will always overextend themselves financially and need professionals to help them figure out what their options are. If you don’t already work at a debt counseling firm, you will need to learn how to become a credit counselor. Since you will be working with customers on a plan for how to pay off their debt, it’s helpful if you have some counseling experience. You’ll also need to be familiar with debt consolidation loans, how to lower monthly interest rates and how to steer clear of bankruptcy (which means being well versed in bankruptcy law). If you don’t have these types of skills but see the value in this type of business idea, you can hire experienced credit counselors to work for you. When you research how to start a credit counseling business, you’ll see that you have the option of seeing clients locally and in person or making your counseling services available via email and phone. In either case, you should have a website populated with as much information as possible about options for getting out of debt, budget worksheets, tips on dealing with the IRS, etc. Outline your rate chart and meet with clients in your office or over the phone. It is likely that you will need to meet with a single client several times (once a month for six months, for example) to monitor their spending and debt reduction. You can charge by the meeting or offer package deals that include a certain number of meetings over a certain period of time. Some clients will need more help than others so it’s important that you are flexible with your schedule and your rates. If you have counselors working for you, they can work in your office or if your business is online only, they can work from their homes as well. As you are able, branch out to include services that help people modify their spending habits so as to avoid having debt problems. With excellent advice and continued encouragement to your customers, credit counseling can be one of the most rewarding online business ideas you can start.
A Day in the Life of a Credit Counseling Business Owner:
If you operate your business in an office, you will arrive before it’s time to open for the day and check your schedule for any appointments. If you operate online only, you will also have appointments throughout the day, but they’ll be strictly on the phone. In either case, if you’re meeting with a new customer, you will arrange for them to receive basic how-to instruction regarding lowering their spending. You will collect spending information from them and discuss ways to cut out some of their “wants” while leaving enough funds to take care of their “needs.” You will give them some “homework” and schedule their next meeting. If you’re meeting with a returning customer, you will review their spending and budgeting charts and discuss how their spending habits have changed since your last meeting. You will help them lower interest rates by either contacting creditors directly or advising them on how to make that contact.
About Your Customers:
Your customers will be individuals who either have major debt issues or are worried about going too far into debt. They are in need of professional help to get them out of debt or keep them from getting into debt.
What You Need to Start:
- Experience in debt counseling or a staff of counselors
- Membership in credit counseling association (optional)
- Storefront and/or website
- Marketing materials
- Worksheets, pamphlets, etc. for customers to take home and review
- Computer with spreadsheet and finance software
The Good:
- Credit counseling services will always be in demand.
- If starting this business online, start-up costs are minimal.
- You can hire skilled credit counselors if you are not qualified to offer counseling.
- It is highly rewarding to help people get out of debt.
The Bad:
- There can be ebbs and flows in this business depending upon the economy.
- It can be emotionally challenging working with people and their debt.
Resources:
- National Foundation for Credit Counseling
- Association of Independent Consumer Credit Counseling Agencies
- Bureau of Labor Statistics on Credit Counselors
- Wikipedia on Credit Counseling
About The Author
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