Ford Credit: Business as Usual

One major credit arm claims it stands out from the crowd of automotive lenders whose policies reportedly tightened up over the last year or so.

Ford Credit, lending arm of Ford Motor Co., says it did not change practices during the credit crunch because its business models have helped it more accurately predict payment behavior compared with generic models.

That allowed the captive lender to extend credit to a wide variety of customers as a regular part of doing business, says Margaret Mellott, Ford Credit spokesperson.

“Our lending practices are prudent, yet we buy a broad spread of business and always maintain a focus on support of Ford Motor Co. sales,” she says. “Customers who qualified a year ago for credit would qualify today, too, unless their financial situations changed in that period.”

Recession or not, Ford Credit has not changed its credit practices for about six years, she says. The company uses proprietary scoring models that more effectively determine risk than other scores alone, and that means it can extend credit to a wider customer base, Ford Credit claims.

“Our models evaluate factors including customer and contract characteristics,” Mellot says. We also look at factors such as employment history and capacity to pay.”

She says practices are “prudent and consistent” across its four brands (Ford, Lincoln, Mercury, Volvo).

Ford reduced its equity stake in Mazda Motor Corp. last year and Mazda now uses its own preferred lending providers.

Ford also still is in the leasing business. “Leasing levels have varied widely over time, reflecting changing business cycles and market conditions. We always monitor market conditions and adjust marketing programs accordingly,” Mellott says.

Concerned that consumers would stay away from showrooms because they perceived restricted loans were widespread in the industry, Ford Credit sent its dealers a letter about a year ago to reassure them that it still had a credit arm willing to lend.