should people with bad credit pay higher maint fees?

Discussion in 'Lawn Mowing' started by bobbygedd, Nov 14, 2004.

  1. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    i was just thinking.....you have a bad credit rating, you get crappier deals, right? you get credit cards with annual fees, higher % rates, stiffer late/over the limit fees. you buy a car, you get a higher interest rate, therefor the car cost you more. same with a house. if you have bad credit, you pay higher prices than someone with good credit. so, since the common lawnboy is so bold as to issue credit to his clients, shouldn't the ones with bad credit be charged more? makes sense to me. that's the way the rest of the world works
     
  2. SodKing

    SodKing LawnSite Bronze Member
    Posts: 1,648

    Most of our accounts are either homes with a value greater than $1 mil or commercial accounts for properties worth $3 - $30 mil. Our targeted market does not have cleints that would have credit problems.

    My position being stated, if I were to sign up an account with credit risk I would require the applicant to post a deposit equal to 2 months services and assign a higher interest rate on past due amounts. The price for their service would not be higher and would remain competitive within the respective market.
     
  3. HOOLIE

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    Thats a good idea. Imagine their dismay, thinking they are hiring some dumb shmuck, instead, you have them filling out a form to pull their credit.

    Probably would help to instantly weed out the less desirable customers.
     
  4. shepoutside

    shepoutside LawnSite Bronze Member
    Posts: 1,205

    Mine do, as I have a over 30 day late penalty, then collection fee's if it goes beyond that. I'm not going to do credit checks on most of my potential customers, and commercial accounts rewire a purchase order. Part of when I go to quote a job, is to interview them too, and will quote extra high, or not at all, if I get a bad vibe. While quoting in the spring, the guy gets a phone call, and answers it in front of me, tell'n B.S. story to his credit card company. Needless to say, he never became my customer. Think if I knew they were a risk, then they would have to pre-pay.
     
  5. Bull

    Bull LawnSite Senior Member
    from NC
    Posts: 308

    Sodking, I agree with your last comment or approach to handling credit issues but do not be misled to think that just because someone lives in a large house, drives fine cars and seems to have the best of everything that they are not a credit risk or can become one. My brother-n-law works for a doctor who makes $750k plus a year and they are always either paying him only a portion of what they owe or asking him to hold the check until a certain day. In his eyes they are a credit risk. Sometimes even more so than the average homeowner out here honestly living from week to week.
     
  6. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    I was mowing a home that was forclosed on by a bank. It was selling for $2.3 million, so dont be so sure they dont have credit problems.
     
  7. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    Do they give you their social security # so that you can verify their credit?
     
  8. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    i don't know scott. is that what i need? this new, ingenious plan i have is still in its embryo state.
     
  9. CuttingCrew

    CuttingCrew LawnSite Member
    Posts: 193

    One of our clients that lived in an $875,000 house filled bankruptcy last month. He never missed a payment to us though.
    I base it on my experience with the customer.
     
  10. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    Yeah thats what you need to do a credit check on them. I doubt they will give it to the "lawnboy". You could make up a credit application though, for those who wont pay in advance, just to belittle them.
     

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