Think about the last time you ran a prospect’s credit score…

Did they warn you ahead of time that it might be a little low? Did they even know what their score was?  In an article from Autonews.com titled Subprime Segments Losing some Lenders, it placed emphasis on the subprime segment and how the economy is boosting its growth. It also stated that according to Americredit, ”more than 40% of the population could be considered below-prime credit.“ Once upon a time, before the economy tanked, people paid their bills on time and monitored their credit. But when you’re faced with job loss, some bills, such as your mortgage and car note, become more important than others and you reluctantly fall behind.

Many subprime lenders went belly up or merged with larger corporations.

This left few who are hesitant to compete for fear of collapse. A study showed that the number of finance companies servicing customers with risky credit shrank about 20 percent in 2009, going from 220 to 175. With being considered in the subprime segment becoming the norm, more banks and finance companies will probably swell again this year as they are able to tap improving credit markets for funds. Lenders recognize the increase in the subprime customer pool due to the economy and know that the subprime auto business is slowly recovering since the recession.

According to Experian, 16% of new vehicle loans in the 2009 4^th quarter were to subprime buyers.

Most banks do have 2-tier lending, servicing both prime and non-prime…but a few lenders, such as Ally Financial Inc, are pulling out of subprime lending because it is too risky in this economy. GM, one of Ally’s customers, is currently failing in the subprime market because of this. Honda made 20% of their sales subprime customers in their fourth quarter 2009, while GM only got 1% because they couldn’t access subprime loans for their buyers. GM now knows the importance of subprime customers and is currently lining up banks and other financial institutions to make loans and lease deals for buyers with poor credit.

So you find that this customer cannot be approved… at least right now.

Do you work with them so that 6 months down the road, after a little credit repair, they can get financed? Do you turn them away and move on to the next one? Although 40%+ of Americans are considered subprime, with the economy improving, those Americans will be looking to get their credit back on track. Wouldn’t assisting them with that effort benefit you more when they finally reach their ideal score.