Credit Checking

To offer credit implies trust. You believe that your customer can, and will, pay on time. This trust can be based on either your own experience of that customer or as a result of information obtained from other sources with that experience.

Third party sources may include credit reporting agencies, creditors and suppliers, banks and trade organisations.

To decide how much credit to allow (the "credit limit"), an opinion can be purchased from a credit agency or an internal calculation made. Customers should not be permitted to exceed their credit limit, but the limits should reviewed periodically.

A "risk code" for each account also enables attention to be focussed on perceived high-risk credit.