OVERCOMING THE NO CREDIT JITTERS
How to Attract the 100 Million + Customers Other Businesses Ignore
By Michael Nathans
Many of us take credit for granted. For up to 100 Million people in the United States, though, credit isn't a part of their everyday lives. These are people who often don't use banks and have little or no credit history. For these people, credit is not something that can be taken for granted, and for many of them credit is a mysterious and daunting creature.
Given all of the recent hysteria about credit crashing down and ruining the global economy, it's not surprising that the subject of credit has gone from touchy to "I don't want to talk about it" for many people. You can imagine that the average person with no credit history is probably a little nervous about buying anything on credit for fear of ending up like the people we see on TV losing their homes, their cars, their jobs, etc.
The good news is, now you can make well-informed credit decisions about customers with little or no credit history based on their regular monthly bill payments for obligations such as rent or a private mortgage, utilities, phone, cable, and insurance with a PRBC® Consumer Reports with FICO® Expansion® Score (For more info, check out PRBC, a subsidiary of MicroBilt). The FICO Expansion Score has the same familiar 300-850® score range as the classic FICO score and similar risk ranking power, making it easy to understand and use.
What good is bill payment data without customers, though? You've still got to appeal to thin- and no-credit history customers in a way the gets past their initial apprehensions about credit. Here's how:
3 KEYS TO OVERCOMING THE NO-CREDIT JITTERS:
- EXPLAIN REGULAR BILL PAYMENTS
Using services like MicroBilt's PRBC allows you to find your new creditworthy customers. The PRBC Report provides a payment history that can demonstrate a consumer's willingness and ability to pay regular bills on time, such as rent and utilities; a payment history that can be used to make good credit decisions. That's great, but many people don't know what "bill payment data" is or how to show it. Spell it out - its simple to understand and everyone pays these types of bills. Be sure all of your sales staff can explain to a customer that their regular bill payment history is acceptable at your store as proof of their creditworthiness.
- NO JUDGMENT
People who don't have a traditional credit history, or don't use banks at all, list being treated with respect as a key element in the decisions they make about spending. Just because someone doesn't have debt, they don't want to feel like second-class citizens - in fact, you can reward them for it, because no debt usually means no bad credit. There should be no drop-off in service when a customer doesn't have a traditional credit history. With PRBC you can make credit decisions about thin- no-credit history customers just as quickly and easily as you would any other customer.
- SE HABLA ESPANOL
Many of the people with little or no credit history are Latinos. Though there is research to show that Latino consumers' attitudes vary when it comes to using Spanish in financial transactions, if you have Spanish speakers on staff who can work with customers in either English or Spanish, offering the option of speaking either language can be a competitive advantage.
This is only the tip of the iceberg. There are many more things you can do to attract customers with little or no credit history. To see what some creative businesses in North Carolina did, with the help of MicroBilt and internet comedians Rhett & Link, click on the videos to the right.
View Our Other Articles From This Issue of {see} Magazine