Almost every time I ask a business owner or financial manager about their credit process, I hear a story about how much they dislike their credit reports and credit reporting service. The way they describe the relationship, it’s as if they need to take a shower after dealing with it.
The problem
Every company uses outside sources of credit information when making credit decisions on customers and prospects. Many use more than one source and standard credit reports are the most common tool used. Everyone has a “love-hate” relationship with the providers of credit reports for a variety of reasons.
- The information is self-reported by the business to the credit reporting company. It’s not unusual for a company to share limited or inaccurate information just to avoid continued phone calls by the credit reporting company (think repeated sales calls).
- The tactics of the credit reporting companies. Aggressive and sometimes threatening tactics are used to coerce information from businesses.
- Recommended credit limits are made without “skin in the game”. A credit reporting company does not back its recommended credit limit and this can lead to optimistically high limits that aren’t based on any exposure to loss.
The bottom line is that credit reports are the best tool most companies have available to use but they’re still very limited. As a result, many companies have a “love-hate” relationship with them.
A better solution
What if a business could obtain a credit opinion based on the customer’s financial statements? What if the financials had been analyzed by experts who actually guaranteed the result? What if the credit-worthiness of the customer was monitored so that any change was automatically reported to you? How about if the credit opinion also considered collection efforts made because the customer hadn’t paid what was owed? What about actual losses that were paid on the same customer’s payment defaults?
There is a service that can provide you with all this information and more for less than the cost of a typical credit report.
What is it?
As a major trade credit insurance company, Coface gathers financial information on tens of millions of companies worldwide, analyzes the information and makes credit decisions as part of our credit insurance offering. Each credit decision is based on actual exposure (“skin in the game”) because if we’re wrong, we pay our clients for their loss.
For companies who don’t want or need to insure their open credit, Coface offers a credit information service that is based on the same process… just without the insurance. Clients get the same underwriter’s opinion, recommended credit limit and monitoring as part of a service that is used either in addition to standard credit reports OR in place of them.
Learn more
If you have a “love-hate” relationship with your credit reports and want something better – click here to learn about a better option.
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