How Second-Look Financing Solves Problems

It’s not often a company and its singular product share the same mission. But in the instance of Fortiva® Retail Credit* and its second-look consumer credit program, that’s exactly the case.

Both Fortiva Retail Credit and its robust financing solution solve problems — not only for its network of retail partners, but for the millions of customers they serve every year.

As some 90 million U.S. adults have FICO® credit scores below 700**, retailers have faced a daunting challenge penetrating this huge credit-strapped market. (In 13 states, in fact, at least 40% of the population is considered subprime***.) These individuals are still consumers, but financially hamstrung by credit denials from prime lenders.

Fortiva Retail Credit’s mission from the outset has been to leverage technology to build and deploy an instant credit alternative that addresses this market — one that serves its partners and their customers with a seamless experience and outstanding support.

The solution is second-look financing. It’s deployed in the form of a private-label or
co-branded credit card offered by retailers to individuals who score just below the FICO threshold for prime borrowing creditworthiness. It’s an answer for millions of consumers who may have dependable, full-time income but might have been dinged and branded for credit issues in the past.

In fact, 25 to 50 percent of customers who were initially dismissed or declined by a prime lender have been accepted for Fortiva Retail Credit accounts. We leverage our own proprietary models — powered by more than 20 years in the credit industry — to examine data other than just a FICO score to gain better insight into a person’s ability to pay. In some cases, customers have been approved with scores as low as 550.

The impact is compelling.

Second-look financing helps bridge the gap between consumers and retailers. It gives consumers the credit privileges they have earned. It gives retailers a tool that removes obstacles and opens doors to significant new business relationships.

Second-look financing restores a customer’s freedom and control. It removes unwanted labels, helps renew their dignity and affords them an opportunity to rebuild credit. Second-look financing is a measurable way for retailers to demonstrate that they care about customers as people.

Financing also presents the opportunity for cross-merchandising. Customers who finance give retailers access to valuable consumer data and shopping habits, making them more receptive to marketing communications and recommendations on sales, promotions and events. The result is increased sales and revenues on both core and peripheral product lines.

Our merchant partners tell our story best. They have reported that offering multiple finance options has facilitated more sales, driven higher ticket values and boosted customer loyalty. And they have reported that up to 25% of their customers with a Fortiva Retail Credit account not only spend more, but also return to make additional purchases****.

Ultimately, we’re problem solvers. Fortiva Retail Credit can help you create a prime-like
experience aligned to your business objectives. Our development team will work with you to understand your needs and create a value-rich program that maximizes finance approvals and minimizes cost.

Learn why second-look financing is a critical element to increasing sales, building customer loyalty and fostering repeat business activity. If you are interested in learning more about Fortiva Retail Credit, please contact us today.

*Fortiva® Retail Credit is a technology-enabled second look point-of-sale consumer credit program offering accounts underwritten and issued by The Bank of Missouri. The Fortiva Retail Credit program is managed by subsidiaries of Atlanticus Holdings Corporation (NASDAQ: ATLC).
**Experian, 2020 data
***ValuePenguin, 2021 data
****Fortiva Retail Credit’s top 20 performing partners, 2019 data

More Articles