Analyzing the Creditworthiness of the Customers in a Furniture Business

As a person running a furniture business, there is some probability that you will occasionally have customers requesting to be sold goods on credit. This, in turn, means that you will find yourself having to analyze the creditworthiness of customers – specifically the customers who request for credit lines. You would be doing so in order to decide whether or not to give them the requested furniture products on credit. So, how can you go about analyzing the creditworthiness of the customers in a furniture business?

One rather simple way to analyze the creditworthiness of the customers in a furniture business may be by looking at their credit scores. But that approach requires caution. A customer may have a good credit score, and still be a poor candidate for credit. This would be the case if that particular customer’s earnings (vis a vis the expenditures) are such that he or she is likely to struggle in meeting the repayments for the credit line you extent to him or her. This is important, because furniture products tend to be quite costly. Selling furniture products is not like selling the best earbuds for smartphones. Neither, for that matter is like selling foldable headphones. The difference is in the fact that furniture products are usually quite costly. As such, the consideration of whether or not a given customer actually has the ability to repay becomes important, when trying to analyze the creditworthiness of that customer.


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