Credit check your customers
Experience has taught us that your chance of encountering difficulties with problem debtors will dramatically reduce if you take one simple step: take out a credit report!
There are a number of reasons why you should credit check customers:
- Accurately assessing your customer's worth helps with your credit decisions and setting credit terms.
- It will verify the correct legal entity you are trading with, which is vital if the debt becomes delinquent and you have to take action for its recovery.
- By monitoring your customer's performance during a course of trading, you will be alerted if their financial position deteriorates. This will allow you to reassess credit terms and if the account is in arrears, and will assist with further decisions you may want to take for its recovery.
- For delinquent accounts, credit checks are important before instructing recovery action. These act as a final way of verifying your customer's legal status and whether other creditors are pressing for payment.
If you would like to verify the name of the company you are wanting to run a credit check on, and find out whether this company is limited or non-limited, check first at Companies House.