Advertising to Deadbeats?

Advertising to Deadbeats?
We’ve recently had a number of members ask why our spring advertising seemed to target people with questionable credit. Are things that tough in the marketplace? Aren’t you asking for problems? Why go after people the banks try to avoid? These are all good questions, and as member-owners you have a right to know.

First of all, we call it “relevant lending” and it’s something we’ve been involved in for a number of years. If you think back to 2009/2010 when we had the big meltdown in the economy, a LOT of people lost jobs or had their hours cut drastically. These were good, hard working, honest people with a history of good credit. Their character didn’t change, their income did. And through no fault of their own.

Fast forward a bit and they got back into the workforce. The problem is their credit score suffered and the only folks that would give them money were predatory lenders (Check-and-Go places or finance companies) which continues to affect their credit negatively. That makes it a vicious circle…

We instituted a program that looks at more than just the credit score. We try to get at the underlying story if there’s a credit problem. Bad things can and do happen to good people. Looking at a person’s character plays a big role in our decision, and the goal is not just to make a loan, but to help people repair their credit.

To be honest, there’s also a very good business case for relevant lending. We get a higher rate than on our regular loans, though nowhere near what the predatory lenders charge. More importantly, we’ve found that there’s no member more loyal than those who have been helped when they were down and out. And we should note that even with this approach, our bad loans are less than 1%, below the national average.

So, do we advertise to deadbeats? Absolutely not. We try and talk to those who need a little education, or just a second chance.