Uncovering credit: what do stores consult to open credit?

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Credit granting plays a crucial role in the retail world, directly affecting the profitability and growth of stores. Therefore, this article aims to help understand the behind-the-scenes of the credit analysis process, from the retailer's perspective, revealing essential information and factors about what stores consult when opening credit.

For retailers, understanding the criteria used by financial and credit institutions when granting credit to customers is essential. This understanding allows them to make more informed and sometimes strategic decisions, contributing to more efficient and assertive management when it comes to providing credit to consumers.

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Want to learn more about the topic and get ideas to improve sales ? Keep reading!

THE ROLE OF CREDIT IN RETAIL:
Credit plays a key role in the retail sector, unlocking significant opportunities for both consumers and retailers themselves .

For customers, credit often serves as an essential tool for purchasing higher-value goods and services without the need for immediate payment. This not only increases consumers’ purchasing power, but also allows them to spread costs over time, making more expensive products more affordable.

On the other hand, for retailers, credit can boost sales, customer loyalty and business growth. It attracts a wider customer base, including those who may not have the financial means to purchase products without this credit option.

Furthermore, credit is capable of providing an additional source of revenue through interest and fees associated with financing, thus contributing to the profitability of retail operations.

To improve your knowledge on the subject, check out the video below and find out what stores consult to open a credit account!
YouTube video
WHAT DO STORES CONSULT TO OPEN CREDIT?
When a store decides to open a credit account for a customer, it usually carries out a series of inquiries and checks to assess eligibility and the risk associated with granting credit.
Here are the main aspects that show what stores consult to open credit:

1. Customer Credit History:
First, stores often check with credit bureaus to access a customer’s credit history. This includes information about previous loans, credit cards, and other financial commitments. The goal is to see if the customer has a history of paying on time or if they have past debts .

2. Credit Score:
Second, stores also consider a customer’s credit score. This is a numerical measure that assesses credit risk based on factors such as payment history, outstanding debts, and length of credit. A higher score generally indicates lower risk.