While there are signs that the economy is starting to pick back up, there is no denying that the last few years have been painful in many ways. Not only did dealers, agents and providers all face hard times, the consumers who purchase their products did as well. And that led to credit scores taking a hit – today, those consumers are starting to invest in cars and products again, but many are now less than prime.
Matt Briggs, co-founder and CEO, Credit Jeeves, is looking to give dealers a new tool to help get those customers with damaged credit scores back in the door. His service aims to help them take action to improve their scores, and then drive them back to the dealership to purchase.
“My vision for Credit Jeeves is to turn the everyday adverse events of credit turn-downs, or offering less than favorable terms, that happens every day at dealers into endless opportunity for the dealership,” said Briggs. “In addition, we help consumers understand exactly what is affecting their credit score, keep them connected to their dealer, and let them know when they’re ready to buy the car of their dreams. Our product closes the loop for credit-challenged consumers and ultimately helps dealers sell more cars.”
How it works is simple. An agent signs a dealer up to enroll in the program, with no up-front costs. When a consumer is in the dealership trying to buy, and their credit comes back with less favorable terms, rather than letting them walk out the door, the dealership can offer to enroll them in Credit Jeeves. The consumer pays nothing for it, and it gives them a detailed report of what may or may not be affecting their credit score. But more than that, it gives the consumer specific, actionable items to bring that score up. The dealership, when signing them up, sets the target score, and the entire program is built around helping the consumer reach that level.
Once the target score is reached, the dealership will receive a notice that the consumer will now qualify for the loan they were interested in – giving the dealership a real, solid lead to follow up on. For the consumer, the entire process is free. For the dealership, the cost comes when the lead is generated, after the consumer has reached the target credit score.
But does it work? “The average enrollment has increased their score more than 40 points, and most of those within the first 30 days,” said Briggs. “We are able to convert about 10 percent of people who were completely turned down for credit. For the average dealer, that’s about 10 more deals per month.”
He pointed out that in one FTC study, one in four consumers had errors on their credit report, with a negative impact on their score. He also noted that studies have shown that, in the auto industry, roughly 50 percent of buyers have less than average credit. Right now, he said, dealers just have to let those consumers walk out the door. And he believes it will only get more difficult, not less, with the prospect of more government oversight of the auto loan industry. But beyond just the score itself, he also believes that more consumers will seek to do business with dealers they feel take the time to establish a relationship. They don’t just want to be another face, forgotten as soon as the next deal comes along. Briggs believes that giving dealers an option to help consumers overcome credit challenges will help on both fronts.
He noted that most consumers who are denied credit either don’t know why, or don’t understand how each piece of the puzzle is connected. He sees Credit Jeeves as a way for dealers to increase revenue with pre-qualified consumers who have already expressed interest in buying that specific car, but also as a way for them to build a partnership with those consumers. “We believe credit optimization should be goal driven. By establishing specific goals consumers can take action every day towards buying a car. Just because someone is credit challenged today doesn’t mean they can’t be credit ready tomorrow.”
He continued, “Providing credit transparency and education removes the mystery for consumers on why they were denied and more importantly provides a potential path for consumers to do something about it and ultimately return to buy a car.”