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The 800 FICO Spartans and Credit Score Guidance Marketing
By The 800lb Gorilla | August 19, 2007
I have a marketing idea for you all in regards to reaching out to the public during this low industry period. It has much to do with improving a person’s FICO score. I have for you two great articles for reference starters which I will soon get into, but first off I will discuss a little about the ever eluding 800 FICO borrower. Yes, they do exist.
From my lending experience I have covered thousands of borrower’s credit reports. I have worked many “A-paper” deals and many true sub-prime applications as well. During my short time in my four plus years of lending experience, I have yet to see an 800 FICO score on any of them, yet I am told they exist. I was told they exist, but I always felt I had a better chance of finding Waldo within a hundred mile radius in Siberia. The highest I can remember was a 788 score borrower.
According to Ray Martin, on CBS’s The Early Show with Julie Chen, he says 13% of Americans have an 800 FICO score. I guess that means these people actually “walk on water.” I was astonished by this number. Who are these people? Where do they live? Where can I get a bottle of 800 Score over the counter? Maybe Hollywood should make a movie called The 800 showing these credit score immortals waving their hands at Bankers to invoke Jedi Mind Tricks;
“This is not the loan I am looking for…”
According to The Early Show’s article 800 FICO people “have a credit profile that looks something like this: four to six credit card accounts, no late payments in the past seven years, at least one installment loan — a mortgage or a car loan — with excellent payment history, an average of 10 years credit history per account and a few accounts with 20 years of good history, a low number of credit inquiries (fewer than three in the past six months), no bankruptcies, foreclosures, charge-offs or collections, and debt levels of no more than 35 percent of their overall credit limits per account.”
Did all of that sink in? Sounds like anyone you know? Was The Virgin Mary their Mother? If you do know someone with an 800 score, are they heart attack prone for being obsessive and anal?
Moreover, the important matter of this posting is educating the public about improving their credit scores. Not necessarily to 800, but to achieve the 700 realm or get close enough. Based on late payment data, borrowers below 700 are statistically more likely to have late payments, therefore it is a good goal to encourage people to achieve 700 status. This is not impossible. The idea is to teach the public the understanding, the “know how” and the responsibility to maintain and achieve a good to great FICO score. All it takes is by first you learning more about how scores are calculated, and then you becoming an expert by your understanding to teach it. This is really not rocket science.
With the demise of sub-prime loans and their availability, this is a great time to market your business to teach a new potential client base. This is an excellent marketing weapon for grass roots marketing. No it may not necessarily get you the “quick buck” you experience when sub-prime was hot, but the future is profitable by investing into people. People pay for this kind of information from so called experts. Scheduling a community forum at your local library, bookstore, church or neighborhood center as a credit advisor will create a reputable identity of trust for your business. You can rent a hotel ball room but why not in a non-corporate environment for comfort.
Right now consumers distrust anyone with borrowing a mortgage due to the news media marketing fear; especially against mortgage brokers. The only thing you have control of is to be on the level with the consumer and meet their needs. You do not sell anything but free information and gain the public’s trust. Do not give away brochures or applications, but a business card with your name, address, phone numbers, fax, email and website URL. It does not matter who they are in their credit situation or financial status. They will call you or refer you in due season. This is not a one time seminar you arrange. You should do it twice a month and only market the schedule abroad without a sales pitch. Right now is the best time. Be a lighthouse beacon during this rough weather in The Jungle. Before you can clean the fish you must first catch it, and this is the right type of bait for this season.
Mortgage brokers, loan officers, realtors, and investment counselors will benefit from this type of grass roots marketing. If any of these professionals team up together as a collective, the more the merrier. If this strategy is not already being done, then somebody is going to be doing it, and it might as well be you.
I am not going into details on how to do it because I have two great articles for you discussing it all in detail. The first article was already presented to you from The Early Show with Julie Chen and Ray Martin, Give Your Credit Score a Boost. There is also a video of the CBS broadcast on the article’s page about improving your credit score. One detail I will note is from Ray Martin’s stating this fact, “According to FICO, the median FICO score in the US is about 723, and about 58 percent of folks have a credit score of 700 or better. That means that one-in-four people have credit scores below 700 — or about 66 million people — and they need to get serious about improving their credit score.”
That is 66 Million people who should be attending your community forum.
The other article is by MSN.com’s Liz Pulliam Weston, Four Credit Scoring Myths, which I know will be quite edifying. She points out how lenders and brokers are misinforming borrowers on how to improve their credit scores.
” There’s a lot of misinformation being propagated about what does and doesn’t hurt your credit score, and much of it is coming from sources who should know better: mortgage lenders.
Now, let me say first that I’ve worked with several excellent lenders who really knew their stuff and kept up to date, not only on loan trends but on the information that’s available about credit scoring. That’s important, because the FICO credit score, in its various permutations, is used in three-quarters of all mortgage lending.
But what I heard from several lenders … was the kind of bad advice that can cost you money and keep you from getting the best loans.
So if your mortgage broker gives you any of the following advice, take a tip from me: Find a new broker.”
That just about sums it up. You will not do anything unless you first believe in it. You can not sit in a chair unless you first see yourself sitting in it. What is it going to take for new potential clients and return borrowers to sit in that chair across from your desk? If they do not believe in you they will believe in somebody else. That is all there is to that truth. People are looking for trust in The Jungle.
Topics: Editorial, Marketing, Misc, Mortgages, Real Estate |
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