Chicharrón could simply say, “No,” when Héctor shows up too borrow his guitar. In telling him he doesn’t want to see his “stupid face” and reminding him of things he’s borrowed and failed to return, Chicharrón explains to us that Héctor is a bum. 

The exposition is used as ammo in the push/pull of the scene. Plus, we FEEL FOR Héctor who is clearly down on his luck.