Why does Meu Crediário authorize sales to customers with bad credit?
Posted: Thu Jan 23, 2025 9:04 am
I know that when selling on credit, identifying a customer's risk is a necessity for retailers, but also a challenge. What most retailers usually do to find out if a customer has a negative credit history is to go directly to the credit bureaus to check their credit.
Here at Meu Crediário , however, we recommend that you do something else first. If you know our system and our work, you already know that we recommend selling to some people with bad credit, yes.
And perhaps you have already asked yourself: how is it possible to sell to a customer with bad credit? Why does Meu Crediário recommend selling to this type of customer? Or, even, when is it safe to sell to people with bad credit?
This is all we want to clarify in this article – or, if you prefer, in the video below:
YouTube video
Credit bureaus or credit scores: which one to start with?
When you work with the credit granting system, know that you need to start looking at the credit operation through the letter that the credit score generates .
Let's look at an example:
Initially, we can see a very high adherence of the score in this chain of footwear and clothing stores. In this case, customers with profile A have a default rate of 1.14, while those with profile B have a default rate of 4.06, and so on.
Note that as risk increases, so does default. This means that the facebook database score is actually correct at the time of granting credit.
Therefore, the credit score is the first aspect that the store must check and evaluate.
If you only look at the number of negative records, you will notice that, yes, the more negative records a customer has, the higher the default rate in the store:
In this table, we see that customers who have at least one record have a default amount equivalent to twice that of those who do not have any negative records. It goes from 4.87 to 8.47.
When is it safe to sell to a customer with a negative credit rating?
As mentioned, I know that many stores believe that the first thing to do when selling on credit is to check the customer's situation with the credit bureaus . But in fact, when the store works with our system, it happens the other way around.
The first situation the store should look at is the score letter, which indicates the customer's risk.
Therefore, if the client has a risk profile of A, even if they have a negative credit rating, you can sell, since they represent a very low default rate.
Risk profile E, on the other hand, even without having any negative records, is classified by Meu Crediário as a high risk profile.
What I mean is that you must take care of the customer according to the risk profile they bring to your operation.
We changed the paradigm of first looking at the negative rating in the credit bureau and now we look at the classification in the Meu Crediário system.
This way, you sell to people with bad credit when they fit profile A, which is low risk.
I know that sometimes there may still be some insecurity, so let me give you the same advice I gave to one of our clients.
I remember this client saying that when the system indicates that it is risk profile E, she simply does not sell.
I then told her that, just as she believes in risk profile E, she should believe in risk profile A, even if her name has been negatively impacted at some point . Otherwise, you become a conservative when selling credit – which doesn't help at all.
Do filters help understand behavior patterns?
The filters – marital status, gender, age, number of children, among others – are very important data to arrive at the credit score analysis model.
However, you will never be able to analyze them and find patterns on your own. All this information interacts with each other to create a statistically advanced model.
Here at Meu Crediário , however, we recommend that you do something else first. If you know our system and our work, you already know that we recommend selling to some people with bad credit, yes.
And perhaps you have already asked yourself: how is it possible to sell to a customer with bad credit? Why does Meu Crediário recommend selling to this type of customer? Or, even, when is it safe to sell to people with bad credit?
This is all we want to clarify in this article – or, if you prefer, in the video below:
YouTube video
Credit bureaus or credit scores: which one to start with?
When you work with the credit granting system, know that you need to start looking at the credit operation through the letter that the credit score generates .
Let's look at an example:
Initially, we can see a very high adherence of the score in this chain of footwear and clothing stores. In this case, customers with profile A have a default rate of 1.14, while those with profile B have a default rate of 4.06, and so on.
Note that as risk increases, so does default. This means that the facebook database score is actually correct at the time of granting credit.
Therefore, the credit score is the first aspect that the store must check and evaluate.
If you only look at the number of negative records, you will notice that, yes, the more negative records a customer has, the higher the default rate in the store:
In this table, we see that customers who have at least one record have a default amount equivalent to twice that of those who do not have any negative records. It goes from 4.87 to 8.47.
When is it safe to sell to a customer with a negative credit rating?
As mentioned, I know that many stores believe that the first thing to do when selling on credit is to check the customer's situation with the credit bureaus . But in fact, when the store works with our system, it happens the other way around.
The first situation the store should look at is the score letter, which indicates the customer's risk.
Therefore, if the client has a risk profile of A, even if they have a negative credit rating, you can sell, since they represent a very low default rate.
Risk profile E, on the other hand, even without having any negative records, is classified by Meu Crediário as a high risk profile.
What I mean is that you must take care of the customer according to the risk profile they bring to your operation.
We changed the paradigm of first looking at the negative rating in the credit bureau and now we look at the classification in the Meu Crediário system.
This way, you sell to people with bad credit when they fit profile A, which is low risk.
I know that sometimes there may still be some insecurity, so let me give you the same advice I gave to one of our clients.
I remember this client saying that when the system indicates that it is risk profile E, she simply does not sell.
I then told her that, just as she believes in risk profile E, she should believe in risk profile A, even if her name has been negatively impacted at some point . Otherwise, you become a conservative when selling credit – which doesn't help at all.
Do filters help understand behavior patterns?
The filters – marital status, gender, age, number of children, among others – are very important data to arrive at the credit score analysis model.
However, you will never be able to analyze them and find patterns on your own. All this information interacts with each other to create a statistically advanced model.