A Payday Loan that Cares?

I often must guide clients through several steps to rebuild their credit. While I feel that people are smart enough to make their own decisions, see my payday lending posts 1 and 2, it always feels good to see a company that can not only offer a service, but can help people today with their immediate needs, and their long term goals. 

Here is how it works. 

This may not seem interesting to some, but here is the truth. Some of the biggest payday loan lenders and hard money lenders do not report their loans to credit reports. This is one tool I will be adding to my conversation for people who want to rebuild their credit. 

Credit Matters...

As of the last year had the pleasure to switch from consumer banking and management into business banking. Lending continues to be a large part of my job and I am so surprised how many business owners do not monitor their credit, as it is very crucial to decision making for banks and other lenders. I wanted to share some of the best free monitoring and credit education sites. Note that while all these site have products and services they sell, they also have 100% services and information which is why I am sharing them today.



MyFico.com

This is an excellent education site for all things credit.  Check out the following link for an article from them in regards to building personal credit.

http://www.myfico.com/crediteducation/improveyourscore.aspx

Quizzle.com

This website allows individuals to see their credit and its report quarterly for free. Their hope is to offer users better home mortgage interest rates.

CreditSesame.com

This site gives you a credit score and also information from your credit report. It offers potential savings from several different optoins, (usually credit cards and personal loans.) This credit report is provided by Experian which is one of the three credit agencies.

CreditKarma.com

While very similar to creditsesame.com, I enjoy the simplicity and credit report card that Credit Karma provides. The credit score and report are from Transunion which is another credit agency. Again they solicit the sale of credit cards, personal loans, and other such services as does Credit Sesame.

Dunn and Bradstreet

While most of these have been personal credit sites, businesses can have credit as well. Business that utilize credit from lending institutions normally have it, but even business that utilize vendor terms and relationships will have a credit score too. This is compiled and monitored by a company called Dunn and Bradstreet or D&B. Like also other credit companies they attempt to sell services to monitor and improve credit, however, businesses can at no cost obtain a credit number, also referred to as a DUNS, and can go in to see and dispute incorrect information. While it is difficult to navigate here is the link for seeing if your business has a DUNS number and here is the link to request a business DUNS number. They bury the link for the free request in several pages so the hyperlink should take you right there. 

If you are wondering why lenders think it is so important to have strong credit please check out these articles on the 5C's of credit which explain what lenders are looking for when lending money to businesses.

5C's of Credit Article 1
5C's of Credit Article 2
 

Tell me a Story

Credit unions are brilliant at marketing that the owners are their members.

What psychological impact does that have? Well... A lot.

True Ownership= Real Loyalty

Often in the banking world customers often hear about "shareholders". This is often an either foreign or meaningless word to most people. Then when something goes wrong, people often find it easy to switch rather than working a situation out.

Think about your first purchase as a youth, that thing that you saved up months for. How did you treat the item? Or remember how you asked that special someone to be yours forever after a lot of time and money invested in him or her?

Generally, most people treated that relationship or item very well. When there is ownership there is an increase of positive behaviors and stronger relationships.

Think about it, this is why the U.S. Government stepped in to offer 30 year mortgages. The science showed that homeownership meant less crime, more productive people, and a better society.

There are more studies where employee stock plans (ESP's) have been shown to create greater loyalty and ownership of their respective jobs.

What people in general fail to realize about "shareholders" is that they themselves are just that! Any company offering a 401k or some sort of retirement plan are investing in mutual funds that more often than not have a bank holding company in it.

But still explaining this to customers would be worthless because just telling someone that does not engender feelings of loyalty.

So how should banks compete with the message that members are owners?

Stay tuned for strange and bizarre thoughts from a deranged banker.

Why Switch?

Many discuss switching costs in banking and an emphasis on "sticky" products.

An interesting article shared some factors influencing people to switch banks. They are...

1. Better rates
2. Banks that won't go bust
3. A bank owned by its customers
4. Split between retail and investment banks
5. A Bank that lends its own money
6. Online and mobile services

Read the full article HERE.

It is an interesting thought that whether or not a person is an "owner" of the bank influences whether they bank there or not. I have more thoughts on this coming in my next post.
 

Yes! Keep the change, Keep a customer

The above picture describes how most everyone feels in their lives at one point or another. You are, were, or will be BROKE.

I received and interesting call from a close friend. He knew I managed a retail bank branch and asked if we exchange coin for cash. I told him we did; however, if we were very busy we ask customers to have it pre-rolled. He then related his story to me. He went into his own bank and asked them to exchange a large amount of loose coin. They flat out refused him and sent him away.

Since that day I made it a point to take the extra time to help people.

But this leads me to the big picture point of my post. Banks need to learn how to say YES. Not in the sense of yes, I will reverse all your overdraft fees, or yes I will approve the loan but rather create a relationship to where bankers really educate and help their customers and not just send them away empty handed.

There are so many regulations that prohibit banks from discussing credit due to them not being a "credit" agency. But more times than not people are turned down for products or services, are told you don't fit in our "box" (approval guidelines) and are left with out any real understanding of what to do or where to go.

Financial institutions should create a better way to engage, educate, and find ways to say YES!

Who is out to lunch?

I heard a crazy idea. A bank was considering taking newly graduated grads out to lunch. Don't get me wrong. I think a free meal is great. Heck I will take a free meal even being out of school. But I don't see the lasting value for a corporation to reward its customers with a lunch when it is in the business of safeguarding money.

A free meal will translate into enduring customer satisfaction.

If the point is to build relationships then work on getting staff in a branch that is not constantly turning over!

In Bank Innovation 2013, one of the big ideas is a fundamental shift of clients wanting a minimal relationship with their banks to wanting to be known personally. Read what JJ Hornblass said in his review from his blog 6 Big, Hairy Innovation Ideas from Bank Innovation 2013.

Banks should really focus on what matters to customers before they get their fiscal pick-nick baskets swiped!

Living in the Now- Foursquare and Mobile Banking

In an interesting article Jennifer Geis describes how utilizing foursquare's new push offer from businesses will aid banks to incentivize customers to utilize mobile banking. I think banks should work with companies like foursquare and advertise and educate key demographics who do not use mobile banking to utilize it. Read the rest of Jennifer's great article HERE.