line was increased to $15,000 from around $10,000,” recalls Ndiaye. “When I was traveling for work, I needed larger limits,” she explains. Now a full-time housewife and stay-at-home mom, she still enjoys a high limit. The card she uses most often has a 9.24% interest rate, which is significantly lower than the 19.99% or even 24.99% interest rate offered to those with less-than-stellar credit.
A disciplined saver, Ndiaye has always paid cash for her cars, but many with great credit enjoy major benefits with auto financing. “A customer with great credit has choices,” says Dan Crane, senior finance manager at Prestige Automotive (No. 1 on the BE 100S AUTO DEALER 100 list with $766.5 million in sales). “They can have the best interest rate, the longest term, or go with a lender that they want to use,” says Crane.
PAYING DUES
In her 22 years of business, Sharp, the senior loan officer, has seen mostly fair to bad credit scores for people in their late 20s and early 30s. But recently she was pleasantly surprised when 31-year-old Tychelle Waterson walked in the door. “She’s a rarity,” says Sharp, about her client. “I figured since she was a first-time homebuyer, she would only qualify for Federal Housing Administration lending. And after I got her credit score, I said, ‘You can have whatever you want,'” recalls Sharp. Waterson’s highest score was a 735, but it is customary for mortgage companies to pull a credit score from all three major credit bureaus—Experian (www.experian.com), TransUnion (www.transunion.com), and Equifax (www.equifax.com)—and use the middle score. Waterson’s middle score was a 712, so Sharp was still able to offer the licensed practicing nurse top-shelf assistance. “[A credit score of] 700 and above is the highest tier for us [to give best rates and offers],” says Sharp. “Underwriters kind of cringe at scores below 620.”
Believe it or not, auto dealers cringed at Waterson just a year ago when she went to finance a car. “Buying a car was a lot harder; they gave me a really extreme interest rate, and I got a lower end car,” explains Waterson, who is paying 20% interest on her 2003 Ford ZX2. Waterson had just finished paying off about $5,000 in debt.
A few years ago, Waterson’s student loans and doctor bills started to add up and she got behind on the payments. “I was at a point where I didn’t have a job; I had no income. I was doing childcare at home and going to school for nursing,” explains Waterson. After using the services at a local credit counseling service that helps members with debt reduction, she was able to get on the road to rebuilding her credit. In 1995, Waterson consolidated her medical bills, student loans, and a credit card bill. But she fell on some tough times while she was in repayment and had to add more medical bills in 1997. “Tychelle had a lot of medical bills, a student loan, some collection accounts, and credit cards as well.
“When you get