How a good financial manager can use your credit history backstory to reverse an initial credit rejection.
Interview with credit report expert Joe Stallard.
Joe shares a story about a client who lost several rental homes and cars due to a case of mistaken identity – but it’s definitely not what you think. Listen and enjoy.
“A really good financial manager – whether auto or mortgage – will typically be the person who pulls your credit file and examines it. The job of a good credit manager is to explore those issues with you.
“A young man visited us at the car dealership. He had filed for bankruptcy, but we noticed that he had good credit two years prior to filing. He lost a couple of mortgages/houses to foreclosure and 3 vehicles were repossessed. We realized that there must have been an event. We told him that the banks need to know what happened to you – your story.
“He said it was a case of mistaken identity.”
“That piqued our interest. We said, ‘What do you mean by mistaken identity?’ He responded: ‘I was mistaken for someone else and shot 5 times. While in the hospital, I lost my homes and my vehicles.’
“This was confirmed by over 100k in medical bills. The bank said it didn’t want anything to do with him. We replied, ‘You need to hear his story.’
“The bank finally said, OK, we will do the deal with at least 5k down. It wasn’t a problem. He was a tradesman in the construction industry and was good at what he did. He was able to get his new truck, his credit on track, bought another house and wiped out the issues that plagued his credit history.
“Most people think that the banks don’t care about your backstory. They do, but someone must advocate on your behalf and tell them what happened. Unless they know there is a backstory, they will look at a deficient credit report and reject it out of hand.
“Here’s the key: We waited for the bank’s turn-down. At that point, we knew which credit analyst was looking at the submission, contacted him, explained the backstory, and the decision was turned around.
“If you’re applying for credit, particularly with car dealerships, your initial contact will be the financial manager at the car dealership. While some are lazy and will drop it from the start, others will go the extra step and try to convince the bank that this is a contract worth considering. Finding yourself a good dealership who is ready to be your advocate is an important issue.
“It’s based on relationships – do I want to do business with these people? In the mortgage industry, you’re still dealing with a point person. It may be the loan person at the bank or at the mortgage company. There should be one person you can talk to directly. They want to put the deal together and are looking for reasons. You need to have a good backstory.
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