Car Dealer Ads “ Let us help you with your credit”

Car Dealer Ads “ Let us help you with your credit”

My name is Wayne Sanford, I am the owner of New Start Financial Corporation and have been in the credit industry now for over 11 years going on 12 years soon.

I have analyzed over 16,000 credit reports and a large majority of them are for people trying to purchase or refinance their homes.

Prior to the meltdown one of my companies was approved by Dealer-track who provides the software platform for most large dealerships across the country, for the average consumer think of it like after you deal with the sales person and sales manager then go “in the back” to fill out the paperwork with the finance manager and get all the “extra coverage” presented to you to buy.

Now there is NOTHING wrong with that for both parties, the dealership makes more money and the consumer gets more valuable coverage if they want it to protect them from financial unforeseen incidents.

What I get a REAL kick out of is the advertisements some of them use to make it look like they are doing you a favor by saying they can help you with your credit and they created a separate division to help consumers with challenged credit or credit “with a few bumps on It”.

As with most advertisements if there is even a sliver of truth to it then advertising people literally make a molehill into a mountain.

What pops in my head is an old TV advertisements from some bank about use our bank not the others as we don’t change a fee for you to talk to the bank tellers as well as some other ridiculously made up fees.

While most of it was an outright lie, they made you think are you getting charged those types of fees and don’t know it? Answer—you’re not but their point was they don’t charge some fees that others do.

So let’s explore that same concept with car dealerships and other types in the same way, my personal opinion if they have to lie to you to get you in the door that’s strike one in my book, but it’s done all across the industry so for the small percentage of educated that read this let’s put a little more knowledge into your Christmas/holiday stocking.

REALITY Check # 1:

  • ALL dealerships have 95% of the same lenders.

Bank lenders have sales representatives whose job is to go to dealerships and say use our bank to sell your product, we will give you great rates and help you make more money and sell more cars.

The job of this sales representative for the bank is not to have them in one dealership but as many dealerships as possible. That does make sense, doesn’t it?

Car Loans are Securitized:

There are what are called in the industry “Bottom feeder” lenders, these are lenders that are willing to loan money for a car at a 480 credit score, if they are willing to put several thousand down for a down payment and charged them the state maximum of 24% interest.

I would almost call this a temporary loan as how long can the customer keep up a payment that is obviously crazy as just like with mortgages majority of the interest gets paid first before the principle ( approx. 70% of pmt is interest ).

So a $20,000 at 24% interest costs the customer $14,560 in interest and is approx. $575 a month. This does not count the few thousand that was given for a down payment.

At 10% interest? Payment is $425.00

The car lender will then repossess the car and sell it at auction and place a collection and possible lawsuit against the client and since very little was paid on due to all the interest paid in the beginning of the loan. Sounds like a good business but I personally don’t know how those people sleep at night ( the lenders not the dealerships).

Our Department/Program will help your credit:

If you know my blogs you know I have a tendency to deviate when I get a thought in my mind I feel you need to know (think of it as backstory).

ANY TIME an account goes on your credit and you make on time payments it will help your credit, that’s not rocket science. And don’t be deceived into thinking it is going to increase your credit score by 100 points.

And while I always say your credit report is like a thumbprint and everything is report specific so your credit score will increase but if it increases 5 points then all the advertisements about helping your credit they mentioned to you to get you in the doors was not a lie.

Credit repair is a service but it is also a bit of a skill as one would need to know all the inner workings of it and how lenders view that report and score. If a credit expert does not know this then how can they truly help the client and if you are the client are you not paying for that expert advice? Too help you navigate thru a system that media (paid by banks and credit bureaus) that makes it seem like all you have to do is click a button and things will be “fixed”.

If you think that then wow is all I can say, I recently was contacted by a client you found me on the internet and read some very nice reviews on me which I thought was nice but was screwed over by a company in the past and wasn’t sure about doing it again, she said her husband got a lot of negative information removed from her credit but she was still declined for a loan.

So I said to her well it’s like going to a dentist, if you don’t check out the dentist first and they are not good, whose fault was that for not checking them out and are you now going to stop going to the dentist?

I told her you need someone who specializes in mortgage credit to help you get into your home and obviously just deleting some negative information didn’t do the job so a decision needs to be made and I will not “sell you” on me, my credentials speak for themselves, if you want me to help I will be here for you now or a year from now if you decide to make that choice.

I do not push people into a decision as I believe we are all adults and can make their own decision without undue influence.

* Want to learn more about how the credit system works?

Buy my book for easy to understand concepts of how credit works and how lenders look at you just email me today at: wayne@waynethecreditguy.com

Credit Repair or No Credit Repair…..Are you a Candidate?

Credit Bureaus say credit repair doesn’t work and it’s all a scam, the Federal Trade Commission tells people (and so do the credit bureaus) that there is nothing they can do that you can’t do yourself.

BUT ISN’T THAT TRUE ABOUT EVERYTHING TODAY???

You can repair your own car yourself; fix your own plumbing or electric issues in your home. You can even represent yourself in court. So why this is not also called a scam?

Economics for one thing, the credit bureaus bring in approximately 11 billion according to a survey that came up in the last year or so. Most articles that you see on the internet are done by seasoned reporters who are good at their job but smart enough to need the expertise of a credit expert for some quotes. I have done many of these. When I first started I was excited and was ready to talk about the type of scams the credit bureaus pull but was told that can’t be mentioned.

When I asked why I was told it’s because the article is being sponsored (paid for) by one of the credit bureaus.

So that means most articles you see out there may be sponsored by the companies who sell your data. That is why you hear the phase “don’t believe everything you read on the internet”. Now its not like they are out there spreading tons of false information of course but understand when they say the main things like pay your bills on time and don’t overspend that is 100% excellent information.

Funny how they never mention much about if the companies that pay them illegally… sorry “make a mistake” on your credit report that hurts your credit score. I have looked at over 15,000 credit reports and never once have I seen a mistake that was in favor of the consumer.

Don’t real mistakes go both ways? At least some of the time?

So how to know if you’re a good candidate for credit repair. Our job is to provide a service, sometimes clients don’t want to bother with trying to figure it all out, others know they are in way over there head like I would feel when I lift the hood of my car.

Of course remember when you call companies to check them out going with your gut feeling helps but understand 98% of the time you are talking to a sales person who’s job is to make you feel comfortable with them and like them so you need to keep your eyes open on a few things first.

#1, after every question you ask after answering they say are you ready to get started?

#2, do they make it sound very easy and there are going to be no problems getting you fixed up. ALERT, unless the negative information is not your (ID THEFT or if you share same name as dad etc) IT’S NEVER EASY! This is one of the things that the warnings about credit companies are warranted.

#3, Do they make claims they can’t verify? For example, they are the number one rated or Industry leader in credit repair. ALERT: there are no surveys done on this, ask them who did the survey and watch them do the Michael Jackson moonwalk backsliding.

So those are just a few things to be on the lookout for, so now let’s talk about when it’s not worth wasting a single dollar of your hard earned money. I have had several people come to me wanting to fix their credit and after reviewing the credit report they would be a fool to pay me or anyone else for that service. They were just lucky they got one of the honest ones and I told them why and if they don’t believe me when calling others what to look out for.

UNDERSTAND the number one thing is if you recently stopped paying on your credit cards don’t expect to be able to pay someone to go in and fix that huge mess.

If the credit card is still open or just closed and your 90 days late and letting it go it will still keep reporting late payments until it’s charged off (180 days).

I have had many people come to me after they started to or stopped paying on all their credit cards or car payments and then ask me to help them as they want to buy a house. This I hate to say are people who are not living in reality and would not be a candidate for credit repair. Why would you expect a bank to loan you maybe 100-300k for a home when you can’t pay a $50 or $100 a month payment on time? It makes sense when you say it out loud but unfortunately very few people put thought into things or make the attempt to educate themselves on the subject matter of interest.

If you were investing in homes and put debt on credit cards and you had to let them all go, paying a credit repair company may not be a good option for you especially if they are large debts as at least in Texas (other states vary) you can be sued for 4 years after the charge off date.

So two main reasons why you may not be a credit repair candidate is brand new delinquent late payments or recent charge offs and very large credit card debts or car repossessions that put the difference of what is owed on your credit file.

Many times if there is a large amount of debt I suggest they talk to a bankruptcy attorney which of course I am not but after 11 years in this business I know enough to tell them the ramifications on any option out there that they have and tell them what I believe is best and point out future ramifications of the decisions they will make today.

When trying to find a credit repair company look for credentials, number one are they registered and bonded with the state they are doing business in?

NOW…. This is really not a credential it’s the law, that’s like an attorney bragging they passed the bar; you kind of have to do that.

Asking for referrals at first glance sounds great but a referral for credit repair is like a referral on a resume…. Do you really think they are going to give you a bad one?

So look for things they make claims to for things you can verify. Telling you they have 30 years of experience and finding out they are personal banker’s means absolutely nothing. So just be wary.

If the credit person you’re talking to tells you what will or should be easy, what will be more difficult or certain things they can guide you on but you have to do yourself that is the making of what sounds to be a good honest credit company who understands the credit bureau frustration tactics and demonstrates what sounds like the ability to help you.

Doing nothing doesn’t make your credit better over time

While technically the above statement is not true not many people want to wait 7 years for all their negative information to fall off their credit report based on the Fair Credit Reporting Act.

Its human nature to bury our heads in the sand and ignore the problem. Hoping it just “goes away”. If you have 7 years to spare then sure it’s not a problem….Or is it?

If you have a tax lien (state or federal) or if you were sued and had a judgment placed against you that judgment can be refreshed every ten years to make sure it remains in the system due to its age and not fall between the cracks.

Banks do not expect you to have perfect credit. If you do then the rates will obviously be better as it means you are a good risk and worth a low interest rate. Having collection accounts, charge offs, car repossessions and medical bills are not deal breakers but it depends on numerous factors, too many actually to list here.

What you need to understand is these problems cannot have happened last month or in the last few months.  Every file is different and specific recent problems, late payments or collections make banks nervous when someone is asking them for tens of thousands of dollars or even several hundreds of thousands of dollars for a home.

I had one executive of a finance company come to me who was originally from England, she had a bad divorce and left the country not expecting to come back but as life has it she returned about 6 years later and needed to buy a home. However, a collection account ballooned up to approximately $50,000 so we had to implement a plan after I gave her the options that were available to her. She said after the divorce she didn’t plan on coming back for a long time until plans changed business wise but she was forced to return and confront the problems of her past.

So the moral of this story is, sticking your heard in the sand for 90% of the time if not more, does not help. We all need to be proactive. Whether that means doing something now or speaking to some professional to gather advice on what to do in the future.

Hope this little blog helps and if you need to speak to me just send me an email to wayne@waynethecreditguy.com and we can set a time to speak!

 

About Wayne the Credit Guy:

Wayne Sanford, also known as “Wayne the Credit Guy“, is the owner of New Start Financial Corporation. With nearly a decade of experience working in the credit industry, Sanford has personally reviewed more than 13,000 consumer credit files for mortgage professionals, investment groups and consumers. – See more at: http://waynethecreditguy.com/waynes-bio