I think the key is, you’d be surprised how many people don’t even know what’s on their credit.
And I think a lot of times what that comes down to is: ignorance is bliss.
The assumption is either people believe it’s better than it is or it’s actually worse than they think. I can’t tell you how many people come to us and say, “Aw, man, my credit’s horrible,” and this, that, and the other.
And we handle this as best as we can. A lot of times we run their credit score and then we tell them, “Hey, it’s really not that bad. You need to clean a few things up, and you’d actually be sitting pretty good.”
Some of those things would be figuring out what actually is on their credit: who says what, do you owe somebody money? You may not even know that. Contact them. Say, “Hey, I worked something out. I know I owe you $300, can we do something on that?”
There’s a lot of negotiating I’ve seen with creditors, where they’re willing to figure something out. Does it take work? Absolutely. But a little bit of work is probably going to save you money in the long run.
Complete Autos is a buy-here pay-here delership that reports all payments whether they’re on time or not. It makes a big difference in somebody’s credit score when they make on time payments with us.
It goes into the whole buying process with financing. We want to sell cars to people who will pay. And we’re not here to set people up for failure. Have we lost deals in the past where people are like, “Oh, I can swing this payment on this car,” and this, that, and the other? Yes. And we will tell them if this doesn’t work—we’ll turn a deal down for that.
We can tell by looking at somebody’s income whether or not they can afford to keep making payments even if they can afford the down payment. We can tell whether or not they can afford to keep it going.
The bottom line is: Can you afford it? It’s just math. It’s an equation. You got X coming in, you got Y going out—it can’t be negative number. We have the conversation with the customer, and that’s part of the whole conversation. That’s part of the champagne taste, beer budget. Help me help you. If I don’t see it, the math doesn’t work.
Then sometimes we’re surprised when they say, “Oh, I got a second job,” or something like that. Sometimes they may require a cosigner. Sometimes that doesn’t matter.
I think for us, with first-time buyers—people who have a clean slate but no credit—we are very adamant to tell those people, “Hey- this is your first time ever getting credit. You’re either going to completely hose yourself or help yourself.”
It all comes down to how can you pay us? You’re going to be digging yourself out of a hole if you pay us not-so-good. If you pay us great, you’ll be buying a house, buying a brand new car.
So really with first-time buyers, somebody who’s never had any credit, we’re willing to give those people a shot with financing. At the same time though, we would be doing them a huge disservice to get them into something out of reach. It’s not ethical to put them in a car payment they can’t afford.