It’s no secret that the finer items in life tend to be a lot more expensive than others. Essential items such as fridges, freezers and washing machines also get a price hike simply because people need them. These higher prices can be harder for people to afford, especially if the purchase is a result of one of these pieces giving up the ghost in the middle of the month, after all the bills have been paid.
Well, catalogue companies look to address these issues, by offering flexible ways to pay for items from the comfort of your own home.
More recently, specialist catalogues have come along, that are targeted at those of us with poor credit ratings, boasting easier approval and interest free payment periods.
Throughout this article, we’ll answer some of the most frequently asked questions regarding these companies, as well as discussing which ones to join, approval requirements and payment options.
Home shopping catalogues are not some new kind of scheme that has just come into prosperity. Catalogues have been knocking around for years on end, it’s only lately that they have been specifically targeted to those of us with a less than friendly credit score. They offer a unique vantage point for us with poor credit, giving the opportunity to afford larger items and the chance to pay on flexible repayment schedules at minimal interest.
With many catalogues offering weekly and monthly payment plants, they pose a unique opportunity when it comes to rebuilding you credit score. Basically, any credit that you can get awarded has the potential to fix your credit score, simply by managing the payments effectively.
It gives you the opportunity to prove to larger lenders that you can manage your finances in a sustainable manner and pay your bills on time, which lowers the risk of lending and makes getting future credit at better rates a much easier business. Poor credit catalogues do differ slightly from the usual brand though. Because you begin as a high risk customer, you’ll be paying higher interest rates right from the word go in a lot of cases.
Once again, we find that paying interest is the cost of having a poor credit score. The higher interest is what makes acceptance a lot easier, so its a win for you and win for the finance company. There a multitude of catalogues to chose from, so finding the right one for you is key to rebuilding your battered credit rating.
The type of catalogue that you should apply for really depends on just how bad your credit score is. Depending on your credit score, you’ll be left with 3 options.
For those of your with a more acceptable credit score, near the 650 mark than masses below it, you should aim to get yourself with a credit catalogue that offers a personal account. With personal accounts, credit limits will be higher and although still high, the interest rates will be lower than usual.
Personal accounts are the hardest to obtain in terms of catalogue credit, so don’t be too disheartened if your application is turned down you still have other options.
The next options is a poor credit catalogue. Here interest rates are much higher, and you credit limit will be a little more restricted. However, with flexible repayment plans in place, you’ll soon build your credit score back up, meaning you can then apply for account upgrades. Many companies now offer credit reviews when you account is run well, so will offer you extensions to your credit limit provided you manage you account sensibly.
Lastly, you have the option to go for a no credit check catalogue. These are similar to the loans you can find in our article on short term loans, also on this website. For a no credit check catalogue, it’s more than likely that you will have to supply a UK based guarantor for you to be able to get credit. Bare in mind that you are probably on your last legs credit wise if you find yourself applying for this, so borrow a sensible amount and make sure you make the repayments if you want to secure any type of credit in the future.
The credit catalogue market is a fairly saturated place. There’s pretty much a catalogue for everything that you can think of, all offering different rates and different credit limits and all accepting a different level of credit scores. Where this can be beneficial, if you apply in the right way, it can also make finding the right catalogue for you an absolute nightmare. We’ve collated some of the catalogue front runners that you should be considering below.
1. Brighthouse: - Brighthouse comes at the top of the pile. There are a number of advantages to this company, the main one being that they have a high street presence with over 280 stores in the UK. This means you can go in and sample products, as well as having a face to face contact for your account. With weekly, bi-weekly and monthly repayment plans, they offer flexibility on a giant range of home products.
2. JD Williams: - JD Williams are ideal for building your credit score, with accounts aimed at those with a lower than average score. However, this company will not be for everyone, as they offer accounts for women’s clothing items, sizes 12-32. If you have a need for this product, then look no further than JD Williams to build you credit score in a sensible fashion.
3. Simply Be: - Simply Be are another company along the same lines as JD Williams, so would be a good choice if you fit their clientele description. With credit limits starting from as little as £125, using Simply Be could be the first steps on the road to recovery of your credit score, and help you secure credit in the future.
4. Bargain Crazy: - Our last offering is Bargain Crazy, who are part of the Shop Direct group that own the popular catalogue companies Very and Littlewoods. They have a wide range of products available for purchase, featuring items previously featured on Very and Littlewoods, which seem to be highly sought after. With flexible acceptance and repayment plans, this would be the choice for your home ware, fashion and electrical needs.
Approval with catalogue companies tends to be a little simpler and a little easier to obtain then lending from a larger high street lender. As always, the calculation of approval comes down to risk vs profit potential.
However, with catalogue companies, as you are only effectively borrowing the exactly cost of an item, rather than a larger agreed credit limit, risk is substantially lowered thus increasing the potential for approval. As well as this, with higher interest rates the potential for the catalogue company to make a profit on your loan is higher, which where this isn’t great for your bank balance, it does mean that you’re more likely to get awarded credit with a poor credit score.
As for physical items that you need to have a valid UK address and an active UK bank account. In some cases you will be provided to show a form of photo ID, to minimise the risk of fraudulent applications. As we’ve mentioned before, your credit history can be traced via your name and address, so even though this credit is easier to obtain, it’s still worth following the steps to cleaning up your credit score we talked about in previous articles.
As a refresh, ensure consistency, close an unused open credit accounts and get registered on the electoral role! Also be sure to take care when entering your personal details into the credit application, any mistakes could throw your application out.
The majority of catalogue payment plans are very flexible, with minimal interest and sometimes interest free periods of up to a year. These companies want your custom, so making payment flexible and straightforward is their number on priority. Perhaps the most popular method of payment is the ‘Buy Now Pay Later’ schemes, which are discussed in more detail later on in this article.
Basically, any way you can pay these catalogues your hard earned money they will accept, with payments available via direct debit, over the phone, online and in monthly instalments, arranging payments is easy, it’s the sticking to them that may be some peoples undoing. For the catalogues offering credit, their are usually monthly instalment options. If you’re looking to build your credit score than these are the options to take. I’d also recommend paying buy direct debit to avoid any later payment fees and excessive interest rate hikes.
By paying monthly, you are demonstrating to larger lenders that you can manage your money in a sustainable and timely manner. This reduced the risk of lending in their eyes, and makes it quicker and easier for you to get credit in the future, and at better rates too.
‘Buy Now Pay Later’ can be a bit of a confusing term, simply because most people associated buying and paying as the same thing. In short, buy now pay later means you can have the item of your choice now, and pay at a later date. How far away that date is depends on the catalogue company and their associated finance provider.
Many stores offer buy now pay later as an offer, with a lot of them advertising a year as an interest free period, after which you repay the item in full. However, it’s worth checking the small print as where they state that it is interest free, there’s often an associated admin fee.
Other buy now pay later schemes offer monthly payment plans though these often come with some kind of interest payments, common schemes are 12+1 programs, where they split the transaction into 12 monthly payments, with one months payment added on as interest. With a multitude of options available to you, it’s important to make sure you chose the best fit for you.
If you know that you wont save and will be unable to pay the full amount in one go, then a monthly payment plan is the best choice, and not paying will have harmful ramifications on your credit score.