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     | Friday, February 04, 2000 - 06:04 am  Here is an idea I had for a business a few years ago. I advertise that I will give ANYONE a 10,000 signature loan for 12 months at 12% REGARDLESS of credit, and that I REPORT to the CRA's. Here is the catch. You come into my office, apply for the loan. I approve you, cut you a check for $ 10,000. Your "account" shows a balance due of $ 10,100 (principle + the first month's interest - every month your account gets charged another 1% in interest until you pay it off). You endorse the check and I hold it for colateral (in effect, you are getting a secured loan since the loan proceeds are coming back to me to "secure" the loan). Every month your loan "balance" gets charged another 1% interest. You can tell me to apply as much of the security to pay down the loan as you want. You can even tell me to apply the whole check on day one, which would leave you with a $ 100 balance. You can even just pull out $ 100 on the day you apply for the loan and include that in your "security" account, in effect paying off the loan on day one. The choices are all yours. Once you pay it off, I report it. (In effect, you are buying a positive entry for as little as $ 100). I am risking nothing, because the check never leaves my office. What does everyone think?
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| | Friday, February 04, 2000 - 07:10 am and you make money how?
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| | Friday, February 04, 2000 - 07:18 am I make (at a minimum) $ 100 for every loan I make. I make $ 100 per month per loan until that loan is paid off. My only costs are membership to the bureaus.
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| | Friday, February 04, 2000 - 07:29 am You'll get classified as a consumer finance lender. It'll be better than nothing on a credit profile but it won't be the nice, glowing report many hoped for.
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| | Friday, February 04, 2000 - 09:35 am What does "consumer finance lender" mean? Also, classified as that as opposed to WHAT?
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| | Friday, February 04, 2000 - 09:36 am seems like alot of work to make $100
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| | Friday, February 04, 2000 - 09:42 am Not really - all done on personal computer (except for the link to the CRA's) - whole process could be done in 1/2 hour - but there are a lot of people that would pay $ 100 to get a "10000 loan paid agreed" entry on their credit report. Repeat customers also (get 3 entries for $ 300, etc.) $ 100 less the cost of reporting for 1/2 hour work sounds like good money to me.
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| | Friday, February 04, 2000 - 10:42 am This sounds much like Excelsiors Program, which is very gray in legitimacy. I agree with Sean, mortgage companies and bank loan officers would certainly want to know who gave this line of credit to the borrower, and what was it for? Being just another consumer finance entry would not make them jump for joy. Another thought, if you were ever investiagted, shouldn't you have money in the bank backing the loans? I doubt they(The FTC etc.) will accept the "the endorsed check is the collateral" defense. In other words, to be a lender, don't you need to have something to lend? If not, why are there not Lines-Of-Credit R Us stores all over the country? But I can't fault the entrepeneurial spirit of anonymous! Check out Excelsior here: (this is not an endorsement for something I consider less than legal) http://www.excelsiorfinancial.com/ This is just my 2 cents worth... I look forward to reading others ideas on this matter. Good Luck, Barry Noret CreditMania.com
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| | Friday, February 04, 2000 - 10:59 am What I proposed is NOTHING like what excelsior is doing - they are simply selling you an entry that you can pretty much tell them how to make it look (backdating too, no less). I would be making you a loan. The $10,000 check would be a good check. If you wanted to deposit $ 10,000 of your own money into your "security" account, you could do that, then take the check to your bank and cash it. I would not backdate anything - I would show the loan being made on whatever date I approved it. I would be, in effect, "making your payments for you out of your security account" on every payment due date, so that every month your loan balance and your security account would go down.
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| | Friday, February 04, 2000 - 12:30 pm I would say the prices are a little steep. Don't you think $100/mo. for a good tradeline is a little high?
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| | Friday, February 04, 2000 - 12:52 pm I'ts only 100/month for as long as it takes you to pay off the loan - as soon as you pay it off, "interest" charges stop. (In reality, only an idiot would not simply pay the $ 100.00 up front, but you never know)
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| | Saturday, February 05, 2000 - 06:21 am So you get a paid off installment loan with one month's worth of history for $100.00?
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| | Saturday, February 05, 2000 - 01:20 pm Anonymous, the major problem with this idea is that it takes a lot to open an account with the 3 major CRA's. 1. You must show in great detail just what it is that your business does. along with a visit from the CRA to your place of business for a visual inspection. 2. Depending on which of the three CRA's you choose, you would need to have a minimum of 25 to 50 accounts to report every month to the CRA. 3. Membership fee's are not to cool at a few hundred to a grand. 4. See number one again as I have made the phone calls and even though it's possible, they do make sure to check all the details of your application. In other words, it is almost like getting a mortgage. 5. Another thought was that you would have to go through the above process with all three CRA's to be of real value to your customers as just one entry on one report would not be that affective. ATM
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