Are you one of the people who made so many late payments towards loan account?.
Reason for your delayed payment can be anything, a “life or death” situation or unemployment, in any probability your reputation among creditors is already damaged.
Getting a Catalogue with bad credit is not completely impossible, there are few companies which are accepting clients with poor credit. But that doesn’t mean all the credit defaulters can repeat their history.
There are few things you should do to get a catalogue and to build a better credit score. Try and find the reason behind your bad credit score and what you can do to improve it. Without understanding the process and functionality of a creditor you cannot build your credit score ever.
What is a catalogue?
To put it in a nutshell, Catalogue is a loan which is specifically offered to purchase products. This kind of loan is not given as cash, the loan amount is directly given to the seller of the product.
In most cases, sellers used to be a popular brand which has retail stores and online stores. The seller will have own credit facility, sometimes a third party creditor will join hands with the seller to fund the customers in the form of loan.
Catalogues normally charges higher interest rate for long term loans, also, it has pretty tough penalty structure. Maximum term for catalogues are limited to 3 years with many creditors.
How to improve credit score with a catalogue?
Catalogues are the best way to build a good credit score. People who don’t have a credit history can apply for catalogue and get the approval easily, similarly people with bad credit also can get catalogues. But not all companies will approve the loan for people with bad credit, there are quite a few companies who are ready to provide loan for people with bad credit.
Once a person gets a catalogue, he/she should ensure timely repayments, thus the credit score will increase on each payment made at right time. Once the credit score reaches above average, then the chances of getting other types of credits like loans or credit cards becomes easy.
Why your credit score is poor?
Buying a credit report might help you see all of your past borrowings and repayments, if at all there is any loan which you never borrowed you can get back to the creditor with proofs that you have not bought any loan. Proofs like statement of your bank accounts with no credit from lenders should do the trick.
But in most cases, lenders will easily find out if you have really bought a loan or not. If you have never borrowed any loans then there is no problem at all, once you solve it with the creditor’s end, you will be able to get all kind of credits depending on your repayment capacity.
To the contrary if you had bought a loan and made a series of delayed payments for a long period of time, then it is going to be a little tough to revive your credit score.
How existing debts affects the approval for Catalogue?
If you have any existing outstanding loan amount or a credit card due, it is better to first pay it off before going for a catalogue purchase. Though the repayments are delayed, creditors will see that you have paid it back and thus will conclude that your buying capacity is increased.
If your existing loans are not being paid back, there is no point you apply for a catalogue, because it will be rejected by all means. Among the array of liability products, catalogues have the highest acceptance ratio. It make sense to apply for a catalogue when you want to bring your credit score back on track.
Why Bad Credit profiles are rejected?
It’s very obvious, every creditor is giving out money as loans to make profit via interest on principle. If a borrower doesn’t repay on time, it affects the interest income of the creditor.
Further, repayments are the source of liquidity, but also the key parameter which has to be healthy and flawless to maintain the business. Low credit score means, the borrower is either a willful defaulter or a person with no repayment capacity.
Despite rejecting bad credit profiles, lending companies still face non-performing assets once in a while.
What can you buy using a catalogue?
Many retail companies offers furniture, mobiles, computers, jewellery, gifts, apparels, accessories, and appliances, these retail brands will help you get a catalogue which enable you to buy your favorite product from them. The product price and the credit limit should correlate, because it directly determined by the repaying capacity of the purchaser.
Each company will offer multiple repayment options, weekly, monthly, bi-monthly and so on. You credit limit should be equal or above the payment schedule. In that case you can buy any product fon catalogue and pay it in easy installments.
How a catalogue loan is approved?
When the loan application is submitted, the creditor verifies the income source with the checking account statement, it helps the creditor to authenticate the monthly income of the applicant. Then the employment status in verified to check if the applicant is an active employee, post verifying these details the loan application will be approved with a credit limit.
The loan amount will be decided purely based on the repaying capacity of the applicant. One should provide authenticate documents and information while applying for a loan, also should cooperate with the creditor if required to verify the credentials.
It is a painful experience to have a bad credit score, however it is not the end of the world. With the above options you will be able to get a catalogue without much complications. Once you get a credit, you should ensure timely payments to avoid further damage to your credit score.
Similarly the timely repayments build a good reputation on you among creditors. Another important aspect that contribute to a better credit score is “Money Management”.
Even before trying to explore a product, decide on your budget. Purchases within your budget is the best precaution one can take.