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Selling leadership in a changing market

National Mortgage Professional
Jun 05, 2005

A niche that can help increase your income: Outsource borrowers with bad creditSherene Costanzotype keywords here..SEPERATE BY COMAS ONLY(,) Do you know that outsourcing your potential clients with problematic credit can save you time and earn you more money? A lower credit score can be a loan officers most frustrating element when creating the best loan to suit a client; however, when the score just does not fit the puzzle, there are options to improve it. Using this niche can help you increase your business. Many loan officers spend time trying to improve their clients score, although this can be extremely time-consuming and frustrating. This time could be better spent preparing loans for clients with a sufficient score. You can send any client whom you cannot finance to a reputable credit restoration company that can assist your clients with their credit problems, so you dont have to. How will outsourcing problematic clients to a reputable credit restoration company help you earn more money? Outsourcing these clients will save you time and optimize your productive hours. Spend your time on clients who do qualify, so you feel more productive each day. However, this doesnt mean that you have to turn away those who dont qualify. You can refer them to a reputable credit restoration company that you trust. A reputable company will help the client increase their score and send them back your way. How will this help you earn more money? You are spending less time on unqualified leads, which allows you to concentrate on the qualified leads and gain a potential future use for those bad leads. How does credit restoration work? A credit restoration company can help you improve your clients credit rating within as little as 30 days. There are several companies out there. Credit restoration is not a debt management or negotiation company. The primary purpose of a credit restoration company is to assist a consumer with increasing their score. Most companies use the Fair Credit Reporting Act (FCRA) that protects consumers rights. The act states that the consumer has the right to question any unverifiable, inaccurate or erroneous information reported on their credit file with any of the three major credit bureaus (Equifax, Experian and TransUnion). This includes: collections, late payments, charge-offs, judgments, tax liens, foreclosures, garnishments and bankruptcies. The credit bureaus have 30 days to verify the account in question with the original creditor. If the original creditor does not verify the account within 30 days, the delinquent account or late payment must be corrected or deleted from the credit file. At this point, the score will be immediately adjusted with the three major credit bureaus. This process is the stem of credit restoration and most companies use this process to improve a clients score. There are companies that may take an extra step to consult the client on how to obtain and maintain excellent credit. There are also companies that may help the client settle accounts that are not removed during the process. How much does the service cost and how long does it take? The average fee for credit restoration is approximately $400. Some companies have fees as low as $250 or as high as $800. Be cautious of the companies that charge higher fees because you can basically receive the same service for a lower fee. Also, some companies may charge monthly fees and drag the process out over a year. This process could be completed within 90 days, so there is no reason to pay a company for a year or more when the same process can be accomplished in 90 days for one fee. Do-it-yourself kits are also an option, but most clients do not have the time or patience to do the process on their own. It is generally better to pay and have the service done professionally. How effective is the credit restoration process? Credit restoration is extremely effective, although it is practically impossible to determine how much one specific action will affect the score. The credit score is based solely on the information obtained from an individuals credit report. If more positive than negative information reports, the score is usually better. A change of one factor can impact the score, however, the amount of impact depends on how it relates to other factors and history included in the report. For example, a person with a long credit history and several positive accounts will be affected less by five late payments than a person who has just recently established credit and only has five accounts total, with all five accounts reporting late. The key is to change the factors that help increase the score, which in turn, will increase the chances of boosting the score. However, it is the responsibility of the client and it is extremely important to remember that building a good credit history over time, by paying bills on time, having a variety of accounts established, and keeping balances below 40 percent of your credit limits, is the best assurance to having and maintaining excellent credit. For this reason, it is impossible for any credit restoration company to guarantee you that your score will increase, though in most cases it will. Remember, the fee is for a service performed. The restoration service is for consulting and challenging, in order to help improve the score. No person or company can control or change the score. Who is a typical candidate for credit restoration and how do credit restoration companies find them? Typically, a candidate for credit restoration has a credit score below 640 and has negative information on their credit reports. Many of them may be in the process of making a major purchase such as a home or a car. Some of them may be looking to refinance or take out a loan for home improvements. A good candidate is also willing to work toward the goal of improving their credit. There is one target market for credit restoration companies to focus on. Some companies may advertise directly to the consumer through the Internet, newspaper or direct advertising. Others may market to industries that utilize credit scores, like loan officers, mortgage brokers, real estate agents or car salespeople. A client that is referred is usually a better route than a client from direct advertising. How does this benefit the loan officer? How can this process benefit you as a loan officer? Instead of tossing these files to the side, make them potential clients by referring them to a reputable credit restoration company. Make sure to follow up with themthis will ensure that they will come to you when they are ready for financing. There is no guarantee that you will close a loan with any person, though with minimal effort, you can refer several potential clients to a reputable credit restoration company. The more you refer, the better your chances of gaining new clients. Just do the math! For example, lets say you average a commission of $1,000 per loan. If you refer 10 people per month to a credit restoration company and five of them close a loan with you, it means five extra loans a month or $5,000. Its that simple. (Some companies may offer referral fees but loan officers are responsible for restrictions with their employer or state licensing department.) The success rate of credit restoration is exceptional; however, when using a credit restoration company, cooperation from the consumer is important. Increases in the score cannot be guaranteed and credit improvement takes time. Credit restoration is a beneficial option for loan officers when their client has a low credit score. The consumer can do this process alone, although it can be very confusing and time-consuming. Deciding to use a credit restoration company is a great idea; however, as with any business, it is important to choose a reputable company that provides excellent service, honesty, loyalty, reliability and trustworthiness. Sherene Costanzo is vice president of Credit Consultants Inc. She may be reached by phone at (888) 522-7007 or e-mail [email protected]
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