How to Credit Check a CompanyChecking the creditworthiness of a company
There are 6 simple ways to check the creditworthiness of your clients
A number of ways are available to test how likely it is that a client will be able to get their bills paid on schedule. If, for example, a small company is held by a single proprietor, it is likely that his creditworthiness reflects his profession - an acceptable creditworthiness would usually be 75 or higher.
Loan statements can be obtained from one of the three most important credit reference bureaus (Experian, Equifax or TransUnion). And who better to ask about a customer's credit than the current customers? It is probably one of the more useful credit check techniques where you ask the customer's supplier how good the client is at making a timely payment.
A problem that can arise is that your prospective client only asks a satisfied vendor for a referral. Also, it is possible that the client only has a good relation with one of his vendors. The best way to hold this back is for bigger clients where you are losing a lot more if they don't get paid on schedule.
The use of a pronounced proposition can help establish confidence between you and the client. Demanding immediate bill payments for the first few deals will give you proof that the client is sufficiently powerful to repay loans once granted.
Examination of creditworthiness of trading partners
Failure to know the creditworthiness of your prospective clients may result in your being either too late or not being remunerated at all. In order to make sure that you are aware of the finances of the businesses with which you do business, ask all prospective clients to make the following information available to you: Agreement to conduct banking preference tests.
Agreement to obtain a credit check from a credit bureau. Agreement to conduct two trading referrals - selected by you as creditor to obtain an unbiased perspective. How is a credit check? Credit assessment is a measure taken by a potential vendor to establish whether it is worthwhile for a client to obtain credit.
Credit reporting contains a plethora of information to help you make better decisions about the clients and vendors you want to do business with. Our audit is conducted on the basis of the Company's historical record and a number of forward-looking statements. Credit information with full credit check is available on every UK (and European) company with which an account has been deposited.
When you are not sure about a customer's credit rating, you can consider a third person warranty.