QA T/F
Agent doesn't have to make it clear this is not a loan
False - You must make it CLEAR to the client that this program is NOT a loan
Home Improvement Loans can be added
False! A lender can typically put a lien against the clients home if the debt is defaulted on
It doesn't change your DTI ratio. You get to keep the cards but the debt is the same
I have a good credit score and have never missed a payment, Why am I not approved for a loan?
Everyone thinks a good credit score means they should qualify for any loan - Debt to Income and Debt to Credit are big factors in lending, coupled with the amount of debt you currently owe will likely make you high risk with a lender. Doesn't mean you can't get a loan it just means you will likely have high interest rates
What is Sympathy?
Sympathy is acknowledging a situation but lacks any compassion with what they are experiencing. Sympathy usually sounds like "I'm sorry to hear that" or "That must be a hard thing"
It's ok to tell clients they can leave out cards?
True - Agents MUST make the attempt to encourage clients to enroll all debt. Never proactively offer to remove it
An Authorized user's credit is not affected by the program
False! The tradeline is being reported to the authorized users credit profile and missed payments will also show on their credit reports -
Authorized users are NOT financially liable for an account and can be easily removed so the missed payments to not affect them
What can Credit Card companies do when your utilization is over 70%?
Raise the interest rate to the Maximum allowed
Why don't loans usually work to get clients out of debt?
Payments are usually the same or higher so they still don't have cash flow. If an emergency comes up they have to borrow again or use credit cards. Transferring the debt to another place doesn't fix the underlying issue of lack of cash
What is Empathy?
Empathy is actually understanding what the other person is going through and relating to their situation
It's ok to just ask the client if they are ok with receiving emails
False - You are REQUIRED to ask if they are ok with receiving emails from Accredited AND Above Lending
Right to offset applies to Credit Cards with Credit Unions
True! Credit unions can pull from a clients bank account and apply the funds to missed Loan, line of credit, secured loan, and credit card payments.
PS: FDIC insured bank accounts can do this for loans and lines of credit but NOT Credit cards.
Why do client's fear a credit score drop?
They have been living off credit because they LACK CASH FLOW and fear what would happen if they can't borrow in an emergency
Why is "borrowing" or withdrawing funds from a 401K a bad idea?
Withdrawing from a retirement fund comes with heavy penalties for withdrawing and it's will also be taxed from the start so right off the bat you are losing 30-35% minimum.
Taking a loan also comes with significant risks - there are caps to what you can borrow
you pay it back with interest
If you lose your job the loan would have to be paid back within 60 days
You are playing with funds that are meant to sustain you when you can no longer work and earn a living
Is Empathy or Sympathy used in this scenario:
Betty is on the phone with her client Barbara who is telling her about her husband having Cancer and him being out of work for about a year. She's accumulated a lot of debt because she was the only income during that time. Betty tells her client "I'm so sorry to hear about your situation, at least you are being proactive in finding a solution"
Sympathy - There is only the "required" I'm sorry to hear that which is such a common response that it carries little meaning and does little to create a relationship with the client
It's ok to minimize the credit impact
False! We need to be transparent about the programs impact to their credit score. Minimizing or soft pedaling the impact will result in cancelations when the client gets to onboarding
Cross Collateralization only applies to Credit Unions?
True! Credit Unions can take payment from a secured loan (auto, home) and apply it to a credit card or unsecured loan payment and default the secured asset. FDIC Insured banks (and Navy Fed) Cannot
What can you advise your client to do to help rebuild their credit?
1. Stay current with other accounts (mortgage, auto, student loans)
2. Add additional funds to the dedicated account to help resolve the debt faster
3. Credit Builder cards (chime/Self) no interest - savings account is the credit limit - additional positive tradelines to help offset initial negatives
Why do client's think a loan will fix their debt issue?
Lower payment - one payment - shorter time to get out of debt
Realistically they would have one payment and typically a shorter timeframe but the payment will usually be about the same or higher BECAUSE the timeframe is shorter. We are programmed to think you can get out of debt with a loan but that doesn't typically work. Without increasing their CASHFLOW they use cards again in an emergency
Is Empathy or Sympathy used in this scenario?
Daniel is on the phone with his client Mark and Mark is telling Daniel how he lost his job during covid and fell behind on his bills and had to use credit cards to cover expenses during that time. Daniel tells mark he isn't alone and found himself in the same situation at the start of the pandemic. Daniel also tells Mark that he is taking the right steps trying to get the debt taken care of.
Empathy - Daniel is using empathy. He is relating to the client situation by discussing similar experiences. This fosters a bond of shared understanding and helps create a relationship
It's ok to skip the 3 key principals
False! - Consistency and Communication should be read as written or very similarly. Patience can be paraphrased while ensuring the client understands this is not a quick process
The GOTA must be read Verbatim
True - you must read ALL parts of the GOTA as written. It's ok to minimally add to the content but all parts must be read as written or very similarly read as written as to not change the meaning of what is written
What is the MAIN reason carrying debt is not a good idea?
Decreases cash flow and creates the debt cycle
Why is a HELOC a bad idea to pay off credit card debt?
You still have to qualify
You are making unsecured debt secured
If you default you could lose your home
What is the #1 Rule of Sales?