June 2001

Attitude Rules

One of our top clients recently requested a visit to our office to conduct an audit of our handling of their accounts.  While such audit requests are not unheard of, they are unusual.

With no other choice than to grin and bear it, the fateful day arrives and in comes the three-headed audit monster disguised as an affable, fatherly figure wearing a golf shirt and a pleasant smile.

The day progresses in the usual fashion with a steady stream of insistent consumers calling our very talented and helpful support staff, to inform us they have just taken the sun’s place in our solar system.  Since they are now the center of the universe, things will be done their way.

For Jennifer, Halina and LuAnn, it matters not what the caller’s disposition may be.  They artfully dispense kind and helpful advice to every caller, like Dr. Ruth at the World Council of Churches.  However, today is different, very different, as someone will say “thank you” and another will notice.

Six hours later, the auditor announces he has completed his dastardly task.  He informs me he has caught us red-handed, and like a good soldier, I reach for my sword and being to fall on it.  “No, you don’t understand,” he says.  “I caught you doing everything right.  The audit went just fine.” Oh, there is a God, I remember thinking to myself, and he picked the right day to come.

So, as the auditor turns to leave, he notices two groups of roses on the front counter and asks the ladies if the boss bought them the flowers.  They kindly inform the auditor that  a debtor who has been making weekly payments for a very long time made her final payment last week.  She came in this week to give us flowers for being so helpful.  “A debtor sent you flowers?” the auditor asks incredulously.  “I’ve never heard of that happening in an agency before.”  Grinning, Halina says, “Well, you must not have audited us before, then.”

I could not have planned it any better myself!  A debtor said “thank you” and someone very important noticed.  A salute to all the great people who handle the telephone for us and each of our clients’ offices, you make a difference.  For it is you, who create the first and lasting impression of every caller contacting our businesses.  Attitude comes through, attitude rules.

R.J. (Bob) Barden, Jr.
President

Hours of Operation

Our hours of operation are:

8:30 am—8:00 pm Monday—Thursday
8:30 am—5:00 pm  Friday
8:30 am—12:00 pm  Saturday

As you can see, our hours are extensive.  This is so we will be available to you and your debtors.  It allows us to receive as well as make calls to your debtors during the productive evening and weekend hours.  Our goal is to be there when your debtors are.

Debbie Hundersmarck
Client Sales & Service Representative

Once-Secret Credit Scores Now For Sale

Equifax, the giant credit bureau, is selling once-secret credit scores to consumers.

For $12.95, consumers can order Equifax credit reports online and get their credit scores, computed by Fair, Isaac & Co.  A credit report without a credit score costs $8.50 when ordered online.

Equifax is the first of the Big Three credit bureaus to sell credit scores directly to consumers.  TransUnion and Experian plan to do so later this year.

If you know your credit score, you can shop smarter for loans.  If you find out that your score is just below the cutoff point for a better interest rate, you can do something—such as closing an inactive credit card account—to improve the score and qualify for better borrowing terms.

Credit scores are important because lenders usually don’t view your credit report when you apply for a loan or a credit card.  Instead, they look at your credit score to decide whether to extend credit to you and on what terms.  The score is a numerical summary of the credit report, based on a formula developed by Fair, Isaac.

Your credit score is similar to the SAT:

- SAT scores help determine whether you go to Harvard or a community college.

- Credit scores help determine whether you get a loan from a regular bank or a company whose late-night TV ads are sandwiched between spots for dial-a-porn services and greatest-hits CD packages.

All three national credit bureaus are required by California law to disclose credit scores to Californians by July 1, 2001, and they have decided that it would be easier and cheaper and more lucrative to sell credit scores nationwide rather than just to Californians.

For their money, consumers who order Equifax’s “Score Power” get what’s know generically as a FICO score, a number between 300 and 850.  The higher the score, the more creditworthy the consumer is deemed.

Experian plans to sell credit scores by July 1, along with a program that will allow consumers to see, in real time, how their credit scores would be affected by closing accounts, paying off balances and applying for new loans.  Equifax and TransUnion don’t do anything nearly as sophisticated as that, although they explain in general terms how a score was calculated and what steps a consumer can take to improve it.

Fair, Isaac popularized credit scoring in the early 1980s when it began working with the Big Three to develop an industry-wide scoring model.  Generically, the number is called a FICO (rhymes with “psycho”) score.

The credit bureaus have their own names for the scores when they market them to lenders.  Equifax calls it a beacon score, Experian calls it an Experian/Fair, Isaac Risk Score, and TransUnion calls it an Empirica score.  Many people in the lending business just call them FICO scores.

Lenders use the scores to decide whether to lend money and on what terms.  A mortgage broker, or example, might turn down anyone with a score below 550, lend money at a high interest rate to people scoring between 551 and 600, and at lower rates for applicants scoring higher.  Generally speaking, 640 and higher is considered a pretty good score.

For years, credit bureaus kept scores secret from consumers because Fair, Isaac didn’t want to open the door to competitors, and it didn’t want consumers to figure out how to hack higher scores.  But when California mandated that credit bureaus disclose scores to Californians, the credit bureaus embraced the concept of selling credit scores to consumers for a fee.

The credit bureaus also will comply with another California mandate that requires them to disclose the top four “reason codes” that explain, essentially, why a score isn’t higher.  Reason codes will explain that you are penalized for making late payments, or are borrowing from a finance company rather than a bank, or because you have too many credit cards or too many accounts with balances or too many accounts without balances.

Holden Lewis
Bankrate.com

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Ann Arbor Credit Bureau, Inc.
311 N. Main   Ann Arbor, Michigan   48104
800.710.4821     734.665.6173
info@a2cb.com