Approximately 40% of the U.S. population has less-than-perfect credit1, with credit scores that range from 550-700 amid the broader FICO scale of 300-850. Although these everyday Americans typically have dependable and full-time income, they fail to meet the criteria of prime lenders. When a prime lender declines credit for these consumers, retailers often miss out on sales.
Second Look Financing products enable qualified less-than-prime consumers to finance their home furnishing needs in a clear and transparent manner, providing a reasonable cost of ownership while providing the retailer enhanced acceptance rates at a low cost.
With the right partner, customers who are declined for financing by a prime lender may have the opportunity for an instant review and credit extension by a Second Look provider, such as Fortiva® Retail Credit2 Rather than look exclusively at an applicant’s credit score for validation, Fortiva Retail Credit’s proven underwriting technology platform and meet-the-sale logic can drive more approvals for your business. The process takes just seconds and can result in approval for individuals with credit scores as low as 550 through a seamless customer experience.
Why Offer Second Look Financing?
Home furnishing retailers understand the importance of offering financing and want to extend some form of credit to as many customers as possible. Second Look Financing can help your business grow by:
1. Approving more customers
Since not all consumers fit into the traditional lending format, and a credit score gives an incomplete picture of their financial state, retailers must rely on alternative sources to provide financing.
Second Look Financing solutions enable less-than-prime consumers to be evaluated for alternative financing options when they are not approved by your prime lender. This payment alternative often features longer terms and lower payments than other lending options.
2. Boosting sales
Offering consumers the ability to spread payments over time drives increased ticket size. This is especially true for those that fall below prime lenders’ cutoffs. The less-than-prime consumer has fewer payment options; therefore, the incrementality of financing options is greatest for furniture and mattress retailers.
Second Look Financing also presents the opportunity for cross-merchandising. Customers who finance their purchases provides you with valuable data and shopping habits, enabling you to deliver more targeted marketing communications and recommendations on sales, promotions, and events.
3. Deepening customer loyalty
Customers who secure credit through you when they have been denied elsewhere develops a greater sense of loyalty. They can receive strong credit limits, resulting in increased buying power and repeat spend. By providing customers with payment options, they have more control over their money and budget. This trust you impart translates into customer loyalty and a competitive edge for your business. From making one sale work, you can open your business up to years of future sales.
Second Look Financing Is a Win-Win
With so many Americans depending on credit and financial flexibility, your ability to extend credit is more essential to incremental growth than ever before. Second Look Financing enables you to offer alternative financing that serves less-than-prime consumers with no money down, low monthly payments, and reasonable total ownership costs. Because it is open-ended credit, it can benefit you through return trips and increased sales after an account is opened.
Backed by over 25 years of experience, Fortiva Retail Credit is a leading Second Look consumer credit program. We’re committed to supporting the financial needs of consumers with less-than-prime credit.
Fortiva Retail Credit merchant partners experience3:
- 30% increase in average ticket size
- 35% boost in incremental approvals
- 30% growth in repeat transactions
Contact us to learn how Fortiva Retail Credit’s financing solution can help you approve and retain more customers.
- Fortiva® Retail Credit Card accounts are issued by The Bank of Missouri, Perryville, MO. Subject to credit approval.
- Based on internal data.