By: Abby Kluesner on February 14th, 2020
5 Challenges That May Prevent Your Customer from a Credit Approval
GreatAmerica Financial Services is on a mission to help you deliver a monthly payment to your customer for everything you sell. When you think of us, we want you to think ease and simplicity. Along with the factors mentioned in this blog, our dedicated credit underwriting team sets GreatAmerica apart from other leasing companies.
When you submit a credit application to GreatAmerica, our underwriters promptly dive in and review your customer’s creditworthiness. We know how important it is to keep the process moving forward, so our goal is to get a credit decision back within the hour. Certain instances call for longer and deeper review, however, we also have instances where the credit decision is back to you within 10 minutes!
Our credit underwriters use public information to gather insight into the current and past credit condition of the clients you send to us for a potential lease. What we find in our research either leads to an approval, a decline or a pending decision. An initial pending status simply means we need to dig a little deeper.
Having both yours and our best business interests in mind, it is crucial that we do our due diligence when determining a potential customer’s ability to pay toward an obligation. In this blog, we highlight five common challenges that make it more difficult to get to a credit approval for your customer:
Challenge #1: Negative Payment History with GreatAmerica
If your client had a previous lease or finance agreement with GreatAmerica, their payment history is something we will be intimately familiar with. If we had a previous negative repayment experience with your customer, such as multiple instances of late payments, a default, or a write off, we may not be able to reach an approval for additional requests.
Challenge #2: Recent History of Bankruptcy, Collections, Liens, or Judgement
A recent bankruptcy may prevent your customer from being credit approved. Other derogatory collections or public records, such as liens or judgements, may hurt your customer’s ability to qualify for credit.
Challenge #3: History of Lease Write-Offs
Underwriters will review your customer’s prior lease repayment history. If your customer has had recent or multiple instances of lease write-offs, the likelihood of a credit approval will decrease.
Challenge #4: Slow Payments on Open Trades or Leases
When other lenders report to credit bureaus that your customer does not make timely payments, this is a warning sign to our underwriters. This might be a sign your customer is unable or unwilling to satisfy their current debt obligations, which would put both your company and ours in jeopardy in the event the customer is unable to pay, especially in instances where we bill the maintenance or managed services portion on your behalf.
Challenge #5: Recently Opened Accounts or Large Balances
If your customer has recently opened multiple new accounts or is carrying a larger debt balance than usual, this can sometimes suggest to our underwriters that your customer is overextended and may put their creditworthiness at risk.
Balancing Challenges with Additional Context and Discretion
Of course we recognize there are scenarios where a credit challenge may be present, but other conditions or additional insight may merit a green light to approve the credit. This is exactly why we feel it is important for a credit analyst to review every application we get, while also striving to provide you a decision within an hour.
While we can’t approve every customer, we do our best to look at the whole picture and make an educated decision. In the event a customer is declined, we will walk you through the reasons for our credit decision. In a case in which your customer has very little credit reporting, there are a few steps we can take to mitigate the risk of no business credit to make an approval. In any unusual circumstances, it never hurts to provide any extra context you possess that we may not have access to. Our team of GreatAmericans thrive on customer interaction and the lines of communication are wide open. Learn more about the credit decision process in this FAQ-styled blog.
Stay tuned for a future blog containing tips and suggestions that encourage your customers to boost their overall credit!
Abby Kluesner joined the Communications and Data Group at GreatAmerica Financial Services as a Credit Analyst in 2016. Prior to that, Abby had spent her summer as an intern with the Office Equipment Group. She attended the University of Northern Iowa and earned her Bachelor of Arts in Finance in Communication.