Credit report (kreditrapport)
Also known as credit information, company report, business credit report
A credit report is the overview of a company's financial position sold by a credit reference agency — accounts, adverse entries, ownership and a score.
- Contains
- Accounts, adverse entries and ownership
- Bought from
- A credit reference agency
- Does not show
- Whether the customer will pay you
In practice
The report is a snapshot built on what is publicly available plus whatever the agency has recorded itself. The score at the top is the part everyone looks at, and it is also the least interesting — it is somebody else’s weighting of figures you can read further down for yourself.
Three places are usually worth more than the score. The age of the accounts: an annual report can be eighteen months old, and a company can travel a long way in eighteen months. The ownership: who stands behind it, and have they stood behind something that went wrong before. The company form: it decides whether there is anyone to pursue personally at all.
And the report does not answer the question that decides the case. It says something about whether the customer can pay. Whether he will pay you — rather than the supplier who chases fastest — is not in there.
Where it commonly goes wrong
- The report is pulled once, at onboarding. Creditworthiness is a state, not a property. Without monitoring you discover the change when the invoice goes unpaid.
- The score is read as a verdict. Two customers with the same score can behave very differently towards you, and it is your own history that knows most about that.