When Paul Snider's business, CreditIQ Inc., made the leap to the Internet, he discovered it took twice as long and cost more than twice as much as expected.

But Snider, president and CEO of the Clearwater, Fla.-based data collection company, also got a surprise: Within six months, its online credit application business was generating a slight profit. And in its first year, the Internet connection accounted for 20 percent of the company's $3 million in revenues, according to a Feb. 21 story by Kris Hundley in the St. Petersburg Times.

Amid the wreckage of dot-com disasters, CreditIQ is an example of a company that was able to build a Web site that enhanced, not replaced its traditional loan-by-phone business. And though Snider told the Times that the company wasted time and money flirting with the idea of an initial public offering at the height of the Internet frenzy, it eventually returned to its senses.

Since its founding in 1994, CreditIQ's niche has always been connecting people who have less-than-stellar credit records with auto, mortgage, bank and credit card lenders through a loan-by-phone service.

The company's commercial customers -- more than 800 car dealers, mortgage lenders and credit card companies nationwide -- publicize CreditIQ's toll-free phone number in print and infomercials that boast "No credit? Slow credit? Bad credit? NO PROBLEM!"

In the case of car loans, most people fill out the loan-by-phone application before visiting the car lot.

CreditIQ's Internet site, which took one year and $250,000 to develop, is a high-tech variation on the loan-by-phone model, according to the Times.

The company's Web site is advertised through partnerships with high-traffic Internet sites such as YouWinIt.com. CreditIQ pays its Web partner for completed applications only, then turns around and sells that data -- at $7.50 to $15 per application -- to car, mortgage or credit card lenders. Credit-IQ can also link its online application to a commercial customer's Web site.

In January, CreditIQ received 2,700 completed online applications. Two-thirds of those were for auto loans.

Though Snider told the Times he expects the online business to grow to 45 percent of the company's revenues by 2006, loan-by-phone applications are still the mainstay. About 100,000 applications are processed through the company's 15-person office each month, with the data then transmitted by fax or e-mail to the commercial customer. Interestingly, about one-third of CreditIQ's loan-by-phone applications are filed during the off-hours between 9 p.m. and 7 a.m.

For data from loan-by-phone applications, CreditIQ charges its commercial customers a monthly fee as well as the per application fee. Monthly fees range from $100 to $500 per month depending on volume while per application charges are $2 to $3.65.

Mark Munson, special finance manager at Autoway Pontiac South in Clearwater, Fla., told the Times that CreditIQ differs from its competitors because it allows him to build in criteria to filter out the worst credit risks.

"I'd rather pay more for good service than pay half-price and be flooded with people who don't really qualify," said Munson, who added that qualified applicants can be completely preapproved over the phone. "I can tell customers what papers to bring and they can drive out of the lot."

After advertising CreditIQ's phone line for about a year, Munson's lot is receiving 30 to 100 applications per month. He estimates 30 percent of those leads turn into sales.

Snider said CreditIQ's services appeal to borrowers who have had credit problems in the past.

"Most of these people have less than perfect credit," Snider said, adding that 75 percent of the company's phone applicants have nonprime credit, with personal credit ratings of B-minus or less. That compares with about 40 percent of the general public. "They don't want to be rejected face-to-face."

To date, online applicants seem to have better credit ratings, Snider said, with only about 30 percent falling into the nonprime category. But Lloyd Trushel, finance director of Sarasota Mitsubishi in Sarasota, Fla., told the Times the applicants he's received through CreditIQ's Web applications are a mixed bag.

"Either their credit is very good and it's easy to get them done or they're absolutely terrible," said Trushel, whose lot receives about 50 to 60 applications per month from CreditIQ. "It seems like the Internet draws the extremes."