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Credit Repair 101
A free guide for consumers

Booklet4.pngAnd...How to start a Credit Repair Business
(a free guide for professionals)

The following are exerpts from the ebook “Credit Repair Secrets” from the author of Credit Aid Software.  The entire “Credit Repair Secrets” ebook is now available free with any software purchase at

For more information about the nuts and bolts of credit repair, please visit our web site at


Your Credit Reports
Credit Scoring
7 steps to boost your FICO Score
How to start a credit repair business


Do you know what your credit score really costs you over the life of a loan? If your score is above 720, you should have no trouble qualifying for a low rate loan. But the lower your score is the more difficult it will be to qualify, and the higher the interest will be. Your monthly payments can be over 40% higher with a low score! Here is a chart that illustrates the effect a low credit score can cost you over the life of a loan

It's as simple as this:

A better credit report will raise your credit score. A higher credit score will get you a lower interest rate. The lower your interest rate - the more money you will save.

You can repair your Credit quickly. You can have negative misinformation wiped away from your reports, you can negotiate with creditors to remove negative postings and lower your payments, and you can raise your credit score higher so you can get the loan that you want at the low interest rated you deserve. All it takes is perseverance, a positive attitude and knowledge. You're reading these tips and that's good positive start.

Just remember: If every single day you do at least one thing to better your credit, you will generate momentum to bring you closer to your goal.

Credit Doctor

    Credit-Aid Software


A credit report is the equivalent of a consumer's financial report card. It details your credit history as it has been reported to the credit reporting agency by the lenders who’ve given you credit. Your credit report lists the types of credit you use, the amount of time your accounts have been open, and if you pay your bills on time.

Your credit report is used by many different companies to make decisions about you. Credit card companies, Banks, mortgage companies, auto loan and insurance companies, also landlords and employers check credit reports to check on your credit history. Why? They know that if you were responsible in the past, you are likely to be responsible in the future (and vice versa).


“Credit scoring” of is a system creditors use to help determine whether to give you credit, and how much to charge you for it. When you apply for credit, the creditor or lender will often request your report (or credit score) from one of the big three bureaus (Equifax, Experian or Trans-Union).  In some instances, however (such as when applying for a Mortgage), the broker or lender will pull reports from all three. These Bureaus grade your “credit worthiness” by calculating your credit history against a system called the Fair Isaac Model.  Fair Isaac uses a variety of factors to determine your score, such as; your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts.

The final outcome of those calculations is referred to as your FICO® score.  FICO® scores range from 300 to 850, but the majority of scores fall between the 600s and 700s. Higher scores indicate a lower credit risk.  A FICO® score above 700 will get you a very good mortgage rate.  A score above 720 will get you an excellent rate.  A score below 700 will make it very difficult for you, and definitely should be worked on.

Correcting mistakes on a credit report in order to repair an undesirable credit score takes time. It's your responsibility to correct mistakes that may appear in your credit report. To do this, you must regularly obtain copies of your credit reports, and contact each of the big three credit reporting bureaus to correct any misinformation.

It’s important to know that credit reports (especially free ones) do not contain credit scores.  If you are repairing your credit and would like monitor your progress, we recommend credit monitoring reports with scores,



  1. Correct all inaccuracies on your Credit Report. 

    Go through your credit reports very carefully.  Especially look for; late payments, charge-offs, collections or other negative items that aren't yours, accounts listed as "settled," "paid derogatory," "paid charge-off" or anything other than "current" or "paid as agreed" if you paid on time and in full, accounts that are still listed as unpaid that were included in a bankruptcy, negative items older than seven years (10 in the case of bankruptcy) that should have automatically fallen off your report (you must be careful with this last one, because sometimes scores actually go down when bad items fall off your report. It's a quirk in the FICO credit-scoring software, and the potential effect of eliminating old negative items is difficult to predict in advance).  Also make sure you don’t have duplicate collection notices listed.  For example; if you have an account that has gone to collections, the original creditor may list the debt, as well as the collection agency.  Any duplicates must be removed!
  2. Make sure that your proper credit lines are posted on your Credit Reports. 

    Often, in an effort to make you less desirable to their competitors, some creditors will not post your proper credit line.  Showing less available credit can negatively impact your credit score.  If you see this happening on your credit report, you have a right to complain and bring this to their attention.  If you have bankruptcies that should be showing a zero balance…make sure they show a zero balance! Very often the creditor will not report a “bankruptcy charge-off” as a zero balance until it’s been disputed.
  1. If you have any negative marks on your credit report, negotiate with the creditor/lender to remove it.

    If you are a long time customer and it’s something simple like a one-time late payment, a creditor will often wipe it away to keep you as a loyal customer.  If you have a serious negative mark (such as a long overdue bill that has gone to collections), always negotiate a payment in exchange for removal of the negative item.  Always make sure you have this agreement with them in writing.  Do not pay off a bill that has gone to collections unless the creditor agrees in writing that they will remove the derogatory item from your credit report. This is important; when speaking with the creditor or collection agency about a debt that has gone to collections, do not admit that the debt is yours. Admission of debt can restart the statute of limitations, and may enable the creditor to sue you.  You are also less likely to be able to negotiate a letter of deletion if you admit that this debt is yours. Simply say “I’m calling about account number ___________” instead of “I’m calling about my past due debt.”      
  1. Pay all credit cards and any revolving credit down to below 30% of the available credit line.  

    The scoring system wants to make sure you aren’t overextended, but at the same time, they want to see that you do indeed use your credit. 30% of the available credit line seems to be the magic “balance vs. credit line” ratio to have. For example; if you have a credit card with a $10,000 credit line, make sure that never more than $3000 (even if you pay your account off in full each month).  If your balances are higher than 30% of the available credit line, pay them down. Here is another thing you can try; ask your long time creditors if they will raise your credit line without checking your FICO score or your credit report.  Tell them that you’re shopping for a house and you can’t afford to have any hits on your credit report.  Many will not but some will.
  1. Do not close your old credit card accounts. 

    Old established accounts show your history, and tell about your stability and paying habits. If you have old credit card accounts that you want to stop using, just cut up the cards or keep them in a drawer, but keep the accounts open. 
  1. Avoid applying for new credit. 

    Each time you apply for new credit, your credit report gets checked. New credit cards will not help your credit score and a credit account less than one year old may hurt your credit score. Use your cards and credit as little as possible until the next credit scoring. 
  1. Have at least three revolving credit lines and one active (or paid) installment loan listed on your Credit Report.

    The scoring system wants to see that you maintain a variety of credit accounts. It also wants to see that you have 3 revolving credit lines.  If you do not have three active credit cards, you might want to open some (but keep in mind that if you do, you will need to wait some time before rescoring). If you have poor credit and are not approved for a typical credit card, you might want to set up a “secured credit card” account. This means that you will have to make a deposit that is equal or more than your limit, which guarantees the bank that you will repay the loan. It’s an excellent way to establish credit. Examples of an installment loan would be a car loan, or it could be for furniture or a major appliance. In addition to the above, having a mortgage listed will bring your score even higher.

Throughout this process, always remember:

It takes up to 30 Days for any of these things to get reported and often longer to reflect on your credit history Reports. It feels like a slow process, but hang in there, because it DOES work.  This tedious process can be made much simpler with the automated help of Credit-Aid™ Software .  Credit-Aid™ stores your user information to merge into its database of letters, saving you many long hours of letter writing.


How and why to start a credit repair business:


Starting a credit repair business is very easy and your timing couldn’t be any better for this lucrative business opportunity.  Nearly 80 million Americans have poor credit.  Many do not understand the credit reporting system and will gladly pay good money for someone to help them with their credit.  Why shouldn’t that be you? 


A credit repair business


ü  Is a recession-proof

ü  Excels during tough economic times

ü  Is easy to run from your home

ü  Can make you money immediately

ü  Is easy to start with very little investment

ü  Pays for itself after just a few clients

ü  Is a great supplement to your existing business and does a service for the community.


Credit repair brings in new streams of revenue and passive income.  Mortgage brokers, loan officers, real estate agents and auto dealers use credit repair to generate new leads and close more loans.  Many entrepreneurs use credit repair as an affordable home business that can earn them an additional $5000- $10,000 a month and more. 


Learning the basics of credit repair enables you to start a new business immediately.


It’s something you can easily do in your home or office, because all you need is a computer, a mouse and a printer. 


There has never been a better time in history to learn about credit repair and Credit-Aid Pro Software shows you the way and helps you maximize the credit repair process in record time.  It’s as easy as clicking your mouse.  Credit-Aid Software is easy-to-use software and not a web-based service or subscription.  There are no monthly fees.  You’ll make back your investment from the first few clients, and after that it’s all profit.


Helping others repair their credit history and have a fresh new head start on life is very rewarding. While it's true that consumers can do this very same work themselves, most people don't want to deal with the aggravation of talking to credit bureaus to correct mistakes, handle disputes or negotiate with creditors. This is where you come in to handle all that for them.


 Here are the steps to get started with a credit repair business.


You are entitled to one free copy a year, and there are three major credit bureaus to see reports from: Equifax, Experian and Trans-Union.


We offer a copy of the Fair Credit Reporting Act right on our site.  We also offer a free ebook with credit repair tips with every purchase of our credit-aid software.  You can also download guides at the FTC web site:


Once you obtain your clients credit reports, you can then work with that client to correct any mistakes, acting as the intermediary between them and the credit bureau or creditor.


A credit repair company cannot “erase” negative items that are accurate and have been present on a credit report for less than seven years.  However, many accurate but negative items can be removed with a bit of finesse if you learn the right negotiating tactics and approach the creditors and collection agencies in the proper manner.

Here’s the good news:  79% of all credit reports contain errors.  This means that MOST credit reports contain errors.  Those errors come off very easily with a few clicks of your mouse.  Simply removing errors will improve a score almost immediately.  Once you’ve accomplished that, you can further enhance a credit report by negotiating the remaining negative items.


The most common mistake more entrepreneurs make is in managing their time poorly. Time spent creating dispute letters and handling paperwork can eat up hundreds of hours and drop your hourly earnings very low.  This is where software comes in handy.  It can help you to work “smart” by saving you hundreds of hours by automating the process and giving you more off-time to enjoy your success.


Now that you have everything in place, it’s time to start promoting and marketing your credit consulting business. You might call local credit repair businesses to get an idea of the services they offer and the types of fees associated with these services. In our own PRO software we give a breakdown of suggested fees.  Some credit repair specialists don’t charge fees at all.  For mortgage brokers and auto dealers the reward can be greater in generating leads and closing more loans. Go through all the information you can find, decide on your fees and services, and get ready to advertise.

It’s easy to create credit repair business flyers and business cards, either professionally or on your home computer. On the flyers, give a brief description about your services and contact information. Remember. Less is more.  Post these flyers everywhere you can. You may also want to place small ads for your services in local newspapers, church newsletters, periodicals and with local merchants who deal with financing: mortgage brokers, real estate agents, auto dealers, etc.

Offer friends and family your credit repair counseling services for free, and ask them for a letter of recommendation. This will quickly help to build your client base. Word of mouth is the very best kind of advertising.

You may want to consider giving credit repair and debt seminars and classes to help people to help themselves before they are too far in debt. Perhaps you might want to give talks at high schools and colleges about ways to stay out of debt. The students will go home with the information you have given them, and your business card or brochure, and tell their parents, who could end up as your next clients.


As a credit consultant, you should start to build your business locally before expanding too fast or going to the internet. If you build your credibility early, when you branch out, you will have experience and a history of customer satisfaction to back you up.

Stay honest with your clients. You are providing them with a very important service. They must trust you and your business. Credit repair can be confusing to many. Reassure and give them the information they want. This will enhance your credibility and increase your credit repair business well into the future.


Running a credit repair business can be made simpler with the help of Credit-Aid™ PRO Software .  Credit-Aid™ PRO stores your client information to merge into its database of letters, saving you many long hours of letter writing.  For more information visit or call 1-800-944-1838 for a free consultation.  Be sure to ask about our current specials!

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©2002-2010 Credit-Aid Software. All rights reserved. Reproduction, adaptation, or translation of this document without prior written permission is prohibited and is protected under the copyright laws. Credit-Aid Software is a registered trademark of Daniel Rosen Inc. All other trademarks are the property of their respective owners. Windows® is a registered trademark of Microsoft Corporation in the United States and other countries. Credit-Aid Software is licensed to install on one (1) computer. All sales are final unless otherwise stated in terms and conditions. Credit-Aid™ Software's intended use is to help automate the process of cleaning up your credit history reports. Credit Doctor Software gives Credit Information, not legal advice. For questions about specific issues regarding your credit, please consult an attorney.