How can a company credit check help you to do better business?

When it comes to company search we’re proud to always provide the latest and most accurate information. This is particularly important when it comes to a company credit check. Credit is a very changeable thing, so having the latest up to date information available is essential.

But what is a credit check anyway? And how exactly can a company credit check help you to do better business?

What exactly is a credit check?

A credit check is essentially an assessment of your ability to pay back debts, and your history in paying back previous debts. If you have always borrowed and paid back reliably, then your credit rating will be relatively high – as people can judge from your previous dealings that you are dependable.

There are some other things that are included in the Standard company credit check package from Company Search MadeSimple:

• Credit Rating – This is a numerical value assigned to a business that is used to establish the creditworthiness of the company. 71-100 is ‘Very Good’, 51-70 is ‘Good’ and 0-29 is ‘Caution’. These values are based on your credit history and other variables including:
  1. Financial history
  2. Current assets – including cash, inventory and investments
  3. Liabilities – including wages, taxes, loans & other debts
  4. Auditors information
  5. Payment history
  6. Director history
  7. Age of company
  8. CCJ (County Court Judgment) information
• Credit Limit – This is an assessment of how much could be advanced to a company in one month and be paid back. This is calculated via credit limit and other variables. The history of the credit limit is included in this calculation and it can change each month.

These are the two chief components of a company credit check. With a view of the credit rating and credit limit you have an accurate and up to the moment assessment of what a company’s credit is like.

How can a company credit check help you to do better business?

You might be asking yourself what exactly the benefit of a company credit check on a competitor or your own business actually is. Well, there are a lot of different benefits outside of the purely informative. A company credit check can help you make better business decisions.

Here’s how:

• Establishing Risk – A credit check is a great way to get an accurate view of how risky doing business with a potential partner is. This can be invaluable to newly formed companies especially, who are particularly vulnerable to the consequences of bad business. By knowing the risk, you can make a more sensible choice.
• Establishing Reputation – As part of our company report packages you can view any County Court Judgments (CCJs) made against the business. This includes whether or not they have been paid. This can give you an indication on how the company is seen by customers or clients – which can be a good indicator of whether or not they are reputable enough for you to do business with.

Getting accurate information on credit is a great way to improve your business decisions. Credit information can change month on month, but by using our live company tracker service you can receive alerts when any change occurs.

This means you have a continuous assessment of the company you are tracking and can make business decisions accordingly.

Company credit checks for secure business practice

Credit checks are an important part of proper business practices, and they can aid you in your own business decisions.

Run a company credit check today and see how that potential business partner seems to the creditors. After all if you can get a better idea of how they see the company you can get a better idea of how reliable they will be to do business with.

Was this useful? Please check out the rest of our blog posts, particularly the Company Credit Check focusses ones.

By Alex Novakovic at MadeSimple – Find Alex on Google+