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If you do a search on “credit repair business,” you will probably notice that the page that comes up has more products telling you how to start your own credit repair business than actual credit repair businesses.  This should seem impossible from an economic standpoint; how can you have more businesses attempting to help you create your own business than said businesses in the industry?  The answer lies in an interesting and common miscalculation of human preferences. 

Chances are, if you were ever in a lot of debt and needed credit repair, you probably talked to your friends or family members about it, and maybe bought a book on the subject.  The book you purchased was probably not very obscure; it was probably one of the prominently listed titles at Barnes & Noble, or the highest rated book on the subject on  Either the book or the advice that you received was mostly common investor sense; don’t open any new accounts, make your payments on time, check out your credit report annually for hints, suggestions or errors, and prioritize your needs.  (You probably picked up a clever uncommon hint or two from one of the bestsellers, if you took that route).  And, assuming that you are actually considering starting your own credit repair business, you were successful and decided to share the knowledge as well.

Having gone through all this, you probably believed that because this was a somewhat challenging experience and required a certain degree of specialized knowledge, you were reasonably capable of handling it on your own, but a lesser person is not.  And this being the case, because the barrier to entry to a credit repair business is low (having acquired experience, you are already halfway there), this does indeed seem like an excellent idea; you’ve got both a market, and can afford the start-up costs.  And so it seems to everyone else.

The problem is that Americans have cultural tendency to overestimate their own intelligence.  Cornell social psychologist David Dunning has demonstrated this and claims that, because we are not typically aware of the limits of our own capabilities, we tend to act act and think in compliance with our own self-esteem.  If this is pronounced in certain areas, it can create an interesting shift in the market supplies based on misconceived demands.

This can, however, be used to one’s advantage even within these circumstances.  You may, ironically, have an easier time marketing products that help others set up their own businesses in a wide range of fields.  This is part of what makes credit repair business packages very useful; they serve as excellent models for marketing.  So even if a credit repair business is lacking in demand despite the amount of marketing directed toward creating them, this automatically implies that there must be a demand for a product of the next highest order.  Don’t be afraid to look at these businesses; they may have more than just face value.  

This Financial Services article was written by Mark Karavan on 10/25/2009

Credit Repair Businesses and Information on Businesses Doing Credit Repair