You may want to cast yourself in the role of the Grinch this holiday season, with a leading broker identifying one credit-protecting rule to share with clients who’ll thank you later but probably not today.
You may want to cast yourself in the role of the Grinch this holiday season, with a leading broker identifying one credit-protecting rule to share with clients who’ll thank you later but probably not today.
“I have a book that hand out to all my clients that shows them what the score is, shows them what the benefits are, tells them not to go over 75 per cent of their (credit) limits,” Jeff Mayer of Dominion Lending Centres The Mayer Group said. “So what I would say is the best and biggest use of your knowledge would be credit … if you go 75 per cent above your (credit limit) you automatically become a risk.”
As the holiday shopping season heats up, many Canadians are chooseing to put large purchases on credit and brokers such as Mayer are taking the opportunity to educate them on habits that build rather than undermine that key rating.
The importance of staying below that 75 per cent ceiling is chief among the tips he shares, but there are others.
“(For example): You get a new immigrant who shows 815 points (on the beacon scale) but they only have one credit card and that’s a secure credit card,” Mayer said. “So, really, their score is great but the lender won’t lend to them because they don’t have a body of credit. So it’s important to educate clients (continued on page two).
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“The more you can walk them through the realistic steps of a mortgage the better you position yourself (as a broker).”
It's a role than more and more advisors are taking on in the quest to cement the kind of stronger relationships with clients that lead to increased retention but also increased referrals. Being an advisor instead of being focused on the transaction is something other brokers are also advocating, pointing specifically to informal credit counselling.
“I tell my brokers who I hire that the most important thing you need to do is be an advisor, so you must educate yourself ,,, you have to go back to school (so to speak) and you have to learn things,” “Educating the client will put you in a different mind space than an average bank specialist because bank specialists aren’t that educated, contrary to popular belief ... there are some that are but (not) the majority.”
Still, it's a hard message to drive home to agents, especially when consumers are in holiday-spending mode.
But they've got to understand, said Mayer, that one key way to protect credit over the holiday season is to not become overzealous in its use. Even if a purchase is paid off right away, it could have a negative impact on a person’s beacon score.
