Helping your customers to manage their credit.

• Author: Woodville, Louisa
• Position: Marketing News

Showing customers how to devise credit-management strategies that could save money is an effective marketing strategy to strengthen relationships.

"Bankers need to be more than moneylenders," says Rick Wemmers, president of Bank Marketing Pros in Atlanta. "Given the facts that banks are losing customers and that the brokerage firms are making inroads, a banker needs to focus on the old 80/20 rule: 20 percent of your customer base gives you 80 percent of your revenues."

Credit reports are the first place to turn. These histories of credit usage can show you how your clients spend money and accumulate, manage, and pay off debt, an intrinsic part of their financial picture. Helping them achieve good credit can save them money with favorable rates and mortgages, lower insurance premiums and enhanced employment opportunities.

Credit reports are also the first place identity theft rears its ugly head-an unfamiliar charge or expense is a red flag that someone might be tampering with files.

Wemmers suggests focusing on the aforementioned 20 percent "Get those customers a letter or a personal phone call and say/We have your account here and we suggest you get a credit report and here's how you do it, and by the way, if you'd like us to review it to see if we see anything, given that money is our business, we'd be happy to do that free of charge."' That's proactiveness that could lead to some fee income. "It's a way you can build back a little of that business that you might be losing," he said.

Three credit-management steps

Here's the suggested process:

* Have your client order a credit report, either from one of the "big three" credit bureaus (Equifax Inc., Experian or TransUnion LLC)--or from a third-party provider such as Intersections Inc., who combine information from all three bureaus into a single document.

* Let your customer know that often information on credit reports is inaccurate. Credit bureaus exchange 4.5 billion bits of data each month, so mistakes are inevitable.

* Even though it's your client's responsibility to report errors to the credit bureaus, you can point them in the right direction. Advise them to enroll with a monitoring service that can lead them through the process of correcting mistakes as well as guard against identity theft. Some inaccuracies can be corrected online, but righting these wrongs is often a surprisingly cumbersome process that requires sending the credit bureau in question letters of explanation in...