How much should you charge for credit repair?
Deciding how much you should charge for credit repair can be one decision that will determine how many customers you end up with and how much money you make.
You should charge enough for credit repair so that your net profit is over 20%. This is going to be after all taxes and fees are taken out.
The average customer of a credit repair company is charged a total of $750.00.
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Credit repair costs
The average cost to repair a clients credit across all industries was between $49.00 and $159.00 per a month with a $99.00 setup fee.
On average a customer will stay with a firm for 7 months resulting seven months worth of profit.
Determining how much to charge for credit repair
Step 1. What is your direct costs for each client?
Step 2. What is you overhead per a month
This is going to include rent, phones, computers, insurance, surety bonds, certifications, and anything else that you need to pay for monthly whether or not you have a customer.This should then be divided by the average number of customers you have each month.
Step 3. Combine the two numbers to get your average cost per a customer.
You need to combine all your expenses into one and number to get your average cost per a customer.
Step 4. Take that number and multiply it by a minimum of 2.5 but ideally 4.
You want health gross margins so you are able to invest more into your business. The average solopreneur in the credit repair industry has margins around 90% but if you have a office and employees the margins shrink to around 60%
Step 5. Research your competition
You need to find out what your competition is charging, you do not want to be the cheapest or the most expensive when just starting out unless you have a way to justify it.
can I charge upfront for credit repair?
Under the CROA act credit repair companies cannot request or receive payment until the the have completed the services they have promised.
The bottom line
You need to have healthy margins if you are going to make it in the credit repair industry. You are providing a valuable service and should be compensated for that.
Determining how much you should charge for credit repair does not need to be complicated. As long as you don’t undercharge or undervalue your services you can experiment with different price points and determine what is going to be the best fit for your business.
