What is a credit check?

A credit check involves a combination of the following elements:

1. General details: how long has a company been in existence? In what sector does the company operate? How many people work at the company? What is the company’s legal form?
2. Financial details: is there sufficient payment capacity? How much is the equity capital? Financial statements filed with the US Chamber of Commerce.
3. Payment record: what are suppliers’ payment experiences with this company? Are any debt-collection proceedings in progress? Did a company register only recently with the Chamber of Commerce? Have there been any bankruptcies or management changes within the group?

All these aspects affect the creditworthiness of the company concerned.

How does this work in practice?

It is simple. On Business Credit Report Online, you first select a product (type of credit report): either our Business credit report United States (Creditsafe information) or our Business credit report worldwide (Dun and Bradstreet (D&B) information). After that, you search for the company in question by entering the company name or Chamber of Commerce number, and order a credit check (credit report) for this company. You will then receive the credit report from us in your mailbox within five minutes. Based on the credit check, you can subsequently decide whether you want to do business with the company concerned.

Many companies regularly check the creditworthiness of all their customers via Business Credit Report Online. This helps them to anticipate changing market conditions and prevent non-payment by their debtors.

Why is a credit check so important?

Just think about it … Would you lend money to someone you do not know? Whether this is a person or a company, you need to be confident that the money lent will be returned to you. By performing a credit check, you will know the company’s creditworthiness, which means that you can decide whether or not you will do business, or whether you want an advance payment for the service to be provided.

Performing your own credit check on the Internet

You can opt to find financial details via the Internet or the Chamber of Commerce. If you carry out your own analysis, you can look at the balance sheet position of the company concerned. This gives you an understanding of the way in which the company’s assets were financed. For a healthy company, the greater part will consist in equity capital. In that case, there will obviously be sufficient funds to pay its current liabilities. The profit and loss account will show you whether the company is profitable. This is another key element, because it gives a strong clue as to whether the company will be able to meet its obligations in the future.

A credit check from Business Credit Report Online will give you greater insight into your (potential) customer’s financial position. If you ask us to perform a credit check, the result will be provided in the form of a credit report. The credit report indicates the company’s creditworthiness. In addition, the credit score indicates to what extent the company can pay its outstanding invoices.

A credit check may recommend, for example, that the total amount of outstanding accounts receivable from a company should not exceed $1,000. If the customer should place a new order before the old invoices have been paid, we recommend that you first have the customer pay the outstanding invoices before making another supply. Communication with your customer is essential in this respect.

Future of credit checks

We have noted that credit checks are increasingly combined with the organic search results on Google. For this reason, Samrate puts an increasing amount of information about companies online. This makes it ever easier and cheaper to check a company’s creditworthiness. An online and transparent check offers much greater value when trying to prevent non-payment between companies.

More information on our credit check and ordering a credit check.