A Brief History of the Credit Repair Business in the United States

As a credit repair business owner, you know your clients’ credit histories intimately so that you can better help them avoid poor credit habits. Another important skill you bring to the credit repair industry is your understanding of how credit works and how the history of credit affects your credit repair business's success.

The Rise of Consumer Credit

As the industrial revolution made more products available on demand and marketing launched into a full-fledged industry in the United States, consumers wanted things, and they wanted them now. Enter consumer credit.

• 1915 to 1930s: Consumer credit replaces the taboo term “consumptive debt”
• 1940s and 1950s: Wartime credit usage increases and the moral censure once associated with the practice of borrowing beyond consumer means all but disappears
• 1960s to 1980s: New technology like color televisions and fax machines become widely available and in demand by the growing middle class, as do new credit cards like Visa
• 1980s to 2000s: Through recessions and a more significant market for technology, consumer credit is now commonplace and a credit crisis begins to emerge

Present day: Your neighbors and friends may be silently suffering from financial overextension, medical bills, or underemployment that makes them victims of the bad credit cycle.

NerdWallet's 2018 American Household Credit Card Debt Study revealed that the average American household owes $136,000 for all types of debt, and almost $7,000 in credit card debt.

This graph from Mary Meeker’s 2018 presentation on the internet trends shows how consumers in the U.S. have an increasing debt-to-income ratio and a decreasing savings rate.

People are getting into more debt and putting less into savings.

Moreover, the presentation explains that in the US, household debts are at the highest level they have ever been, sadly at the same time that unemployment rates are reaching a high as well.

With debt and unemployment increasing, personal savings decreasing, and credit scores more important than ever, it’s up to credit repair specialists to understand how to change the course of credit history for each client and create a better financial future. Learn how your credit repair business can reverse the credit crisis.

Credit Repair: An Escape Route From Bad Credit

Many consumers in the United States feel trapped by their low credit score, hopeless that they’ll ever buy a home or get the car their family desperately needs.

Your credit repair company means hope, a new financial path, and an escape route from the prison of bad credit.

Credit repair companies rose up from the consumer credit crisis, and they are still very relevant today. Modern credit repair companies need to take in the broader credit picture to be most effective with credit repair clients.

Here are some ways that understanding the history of credit repair makes your business grow:

• Credit repair clients will trust that you can help them because you show them the context of their situation in the credit crisis
• You can infuse hope into your clients’ financial situation, as well as be empathetic with their financial survival habits
• You will earn more referrals by being competent and knowledgeable about the industry
• You can educate the community on how credit works as a credit repair business owner who has done their research

Just as an outdoor guide needs to know the landscape to find the best route to your campsite, when you understand the entire layout of your clients’ credit situation, you’ll be able to guide them to a better financial place more quickly (and with fewer detours).

The Future of Credit Repair Businesses

An unexamined history is bound to repeat itself. Take the time to learn about the credit industry’s history and your role in helping consumers, as well as the individual histories of your credit repair clients. Of course, the most critical area to which you can direct your attention is the present.

You can run a profitable credit repair business this year by learning a few simple skills like:

• How to send effective dispute letters for credit repair clients
• How to coach credit repair clients on better financial habits
• Why all successful credit repair businesses charge a recurring fee
• How to work with clients goals to reach their goals

Understanding credit repair better will not only help you grow a thriving business, it will mean the world to clients who get a new financial future with better credit.

Discover the simple steps to run your own credit repair business now with our guide How to Start Growing a Credit Repair Business.