Issue link: http://read.dmtmag.com/i/71813
Master the credit game made credit available to owner- operators, such as truck makers' financial arms, are starting to make loans easier to get. Lenders' access to data from the Compliance, Safety, Accountability Act gives owner-operators more reason to boost credit scores as much as possible, says David Owen, president of the National Association of Small Trucking Companies. Access to CSA data "has already made an impact on the ability of small operators to get loans," he says of small fleet owners. "Banks and lenders go to that data, and if they think they're not safe, they won't give loans." Owner-operators can take advantage of regular bill payments, such as with a fuel card account, to improve their credit, Owen says. "You could take your fuel data to a bank and show them. It establishes a pattern of on-time payment that's very impressive." Owen advises operators to be creative with credit references, using businesses they make monthly or weekly payments to, such as truck dealers. "These guys are old farmers and they pay their bills," he says of more than 3,000 NASTC members, many of whom have rural ties. "Sometimes they wait until their crops come in, but they always pay." Such was the case with Diamond, who heeded tips to pay on time and other advice from ATBS, the nation's largest owner-operator financial services firm. "I had an apartment lease and needed to make those monthly payments," as well as a weekly truck payment. Diamond gradually added miles to his Kroger grocery routes and later improved his revenue even more with a dedicated haul to Canada. Running at least 2,500 miles per week is one of the most important steps in getting out of debt and improving credit 40 OVERDRIVE JULY 2012 Credit scores and interest rates Lenders use your credit score for determining risks and setting interest rates. Credit scores, which include credit reports, can be ordered from any of the three major credit bureaus or from MyFICO.com. The average cost is $17. Beware of websites that charge for only credit reports, which you could obtain free. Lenders currently put more emphasis on payments made on time and differ more on what makes a good score, says NFCC's Gail Cunningham. Traditional interpretation of scores is: • 700 to 850: low credit risk • 600 to 699: fair risk • Less than 600: a bad risk. Visit bankrate.com or MyFICO.com for details. Eddie Walker, of Best Used Trucks, says truckers with ratings from 700 and up can snag a loan ranging from 9 percent to 12 percent interest; with ratings of 650 to 550, 12 percent to 15 percent; and with ratings below 550, 16 percent to 30 percent interest, with transfer and handling fees attached. An applicant with a credit rating below 550 also needs a compelling story with circumstances beyond his control. "We've seen a lot of those work," Walker says. Get the DAC details Keeping up with the Drivers Abstract Compilation is important for owner- operators who want to improve credit scores. To potential lenders, it shows a driver's work history, although it's not the only source lenders check, says Don Neil, of ATBS financial services. He explains that having a good DAC report is now essential under the new CSA scrutiny of drivers' safety records and drug and alcohol use. "That's pretty much the truck owner's report card and does have a significant impact on their" ability to get and retain a driving job, he says. "It's not a matter of debt as much as a driving record." It usually takes about two weeks to get a free DAC report online, and can be ordered at hireright.com/disputes/report. aspx, which also provides instructions for reporting errors. If an error exists, drivers need to get them corrected, Neil says.