A comprehensive company credit check is crucial for understanding and mitigating credit risk. Whether you’re looking to conduct an internal check or examine a company you’re planning on working with, doing a company credit check can add a necessary layer of security to your business dealings.
Knowing a company's creditworthiness and payment history can help you decide whether to extend credit or establish business partnerships.
This blogpost will guide you through the process of conducting a comprehensive credit check, covering key factors to consider and resources to utilise. We’ll talk about the following.
Credit risk is the possibility of suffering a loss in the event that a borrower defaults on their debt. Whether it's a government debt, a company bond, or a personal loan, lending operations will always carry some risk.
Risk management is important if you’re looking to reduce your credit risk. Part of the process is evaluating whether or not your borrower will be able to repay a loan. You can evaluate a borrower’s creditworthiness based on a number of characteristics, such as credit history and cash flow.
When it comes to assessing and managing your own risk exposure, you need to look inwardly to protect your financial assets from different types of risk. It is a case of identifying likely scenarios and taking steps to mitigate these risks wherever possible. Fraud detection tools, such as Vigilance™, help to add an additional layer to your risk management process. Using multiple critical triggers and data points, Vigilance is able to thoroughly assess and validate business information.
Conducting regular credit checks is essential for the survival of any business. However, the exact frequency of these checks depends on a range of factors, including:
As best practise, it is important to conduct a company credit check whenever you’re about to enter into a new business partnership or hand out a loan as this is when credit risk is highest. Always look for the following key insights when conducting a company credit check:
Financial distress may be a vague term on its own. Scores such as the H-Score® and TextScore® show you tangible metrics associated with financial distress to help you make sense of distress levels more easily.
Make sure to have the following key data on file before you start your credit check:
Each company credit check will have its own requirements based on the kind of business you’re conducting and whether the check is internal or external. For most standard checks, however, look for the following fundamental pieces of information:
Conducting a credit check on your own can be risky, especially when you’re not experienced at it. In this case, leveraging a business information provider’s services is the way to go.
Company Watch is a one-stop shop for thorough company credit checks. We provide credit risk scores that are both comprehensive and easy to explain.
In addition to this, Vigilance™ allows you to check for potentially fraudulent companies, while also offering detailed data on directors and execs within the company you’re looking at.
We provide this data by scouring hundreds of thousands of data points across publicly available online sources as well as sources that are not publicly available. This makes for an incredibly thorough and foolproof company credit check.
With Company Watch credit reports, you’ll have the information you need to make informed decisions and protect your company’s finances. This is incredibly important in times of social and economic uncertainty, as having a holistic business information provider can help you stay ahead of the curve and avoid unforeseen financial losses.