- Oct 20, 2013
- 55,608
- 17,639
- 2,250
To anyone who is a business owner and is struggling to keep afloat, this OP is for you. That means that millions of business owners should note the points made here, and take my advice.
First, 1) get rid of any contacts with credit bureaus, but keep on granting credit to customers, based on a more thorough investigation of their credit backgrounds.
Too many (practically all) credit granting businesses rely on bank loans connected with a simple number > credit score. Problem often is though, that these credit scores are generally not representitive of the customers' credit worthiness to make payments appropriately, for what the seller is selling. The two commodities most common to this are cars (new or used) and housing.
Not paying, having late payments for some items can obliterate a credit score. This could be for non-essential things like sporting goods, musical instruments, jewelry, or just an ordinary loan. So, you being the seller, do you really think it is wise to equate a customer's likelihood to pay for these kinds of things, with necessities like cars and housing ? Somebody may go cold on payment for some fishing equipment, but he's not going to be that careless with the roof over his head. Likewise, a car is a necessity in most places, and especially for people with medical conditions needing fast transportation to a doctor's office or hospital.
2) Then there are all the things (credit history) that the credit bureaus have no knowledge of. I can give an example from my own loan history, that includes dozens of loans with Amscot, all paid back on time, without any flaws. Problem is, Amscot does not report to credit bureaus, so they have zero knowledge of this long and perfect loan record. If they did, my credit score would be about 200 points higher than it is. Millions of people are in that same category, with Amscot and other lenders.
3) Looking back at my own experience as a credit granter, I gave credit to hundreds of people over a period of about 12 years, when I owned my own business. I never contacted a credit bureau and they never contacted me. What I did do was ask callers to my business (a video dating service), who said they could not afford the $500 fee (in the 1980s), how much they could pay up front for a membership. Many callers said "Uh 50 bucks", and I tactfully explained that was just not enough for a down payment.
To others, I allowed them to pay $250 down and pay the rest up to 2 months later. About half of the 1600 members I had, joined this way, and lo and behold, 100% of those members paid their balance due, in full, on time. Never had a single fail-to-pay. Think of all the money I would have lost, if I had turned hundreds of paying customers away, because a credit bureau assigned them a low credit score.
First, 1) get rid of any contacts with credit bureaus, but keep on granting credit to customers, based on a more thorough investigation of their credit backgrounds.
Too many (practically all) credit granting businesses rely on bank loans connected with a simple number > credit score. Problem often is though, that these credit scores are generally not representitive of the customers' credit worthiness to make payments appropriately, for what the seller is selling. The two commodities most common to this are cars (new or used) and housing.
Not paying, having late payments for some items can obliterate a credit score. This could be for non-essential things like sporting goods, musical instruments, jewelry, or just an ordinary loan. So, you being the seller, do you really think it is wise to equate a customer's likelihood to pay for these kinds of things, with necessities like cars and housing ? Somebody may go cold on payment for some fishing equipment, but he's not going to be that careless with the roof over his head. Likewise, a car is a necessity in most places, and especially for people with medical conditions needing fast transportation to a doctor's office or hospital.
2) Then there are all the things (credit history) that the credit bureaus have no knowledge of. I can give an example from my own loan history, that includes dozens of loans with Amscot, all paid back on time, without any flaws. Problem is, Amscot does not report to credit bureaus, so they have zero knowledge of this long and perfect loan record. If they did, my credit score would be about 200 points higher than it is. Millions of people are in that same category, with Amscot and other lenders.
3) Looking back at my own experience as a credit granter, I gave credit to hundreds of people over a period of about 12 years, when I owned my own business. I never contacted a credit bureau and they never contacted me. What I did do was ask callers to my business (a video dating service), who said they could not afford the $500 fee (in the 1980s), how much they could pay up front for a membership. Many callers said "Uh 50 bucks", and I tactfully explained that was just not enough for a down payment.
To others, I allowed them to pay $250 down and pay the rest up to 2 months later. About half of the 1600 members I had, joined this way, and lo and behold, 100% of those members paid their balance due, in full, on time. Never had a single fail-to-pay. Think of all the money I would have lost, if I had turned hundreds of paying customers away, because a credit bureau assigned them a low credit score.
~S~?
