Credit Reference

A credit reference is a document that allows you to view how creditworthy a person or a company is. Most lending companies will request a credit reference from an individual before releasing a loan, and most companies will obtain one from businesses that they consider trading with.

The Benefits of Obtaining a Credit Reference

It is beneficial for a company to request a credit reference on a client before deciding to extend credit. The document will allow them to view the client's bill paying history. This information will allow them to decide whether or not to extend credit, how much to extend and what terms and conditions to set. Obtaining a credit reference will also help the company to avoid bad debt as they will be unlikely to extend credit to clients with a bad payment history.

Companies may also request a credit reference for potential suppliers, the main benefit being that they can verify the correct details of the business. It will also reduce the risk of paying bogus suppliers for items they will never dispatch.

Information in a credit reference document is very important and should always be requested as part of the beginning of the decision making process of trading with a company. This is very important, especially if the demise of the company can have dire consequences on your own business.

The following lists the circumstances when it is advisable to obtain a credit reference:

Before deciding to take on a new client - especially if they will be a large account.
When a client asks for more credit - requesting a credit reference will let you know the client's bill paying history.
When there is a change in the client's circumstances like a change in director etc. This may affect the company's credit rating.
When deciding to use new suppliers

Information within a Credit Reference

The contents within a credit reference on a company can vary depending on the size, type and age of the company. For companies that are newly incorporated, the credit reference will contain very little information, this due to the lack of financial data available. Once these companies start filing annual accounts at Companies House, these can be analysed for a credit rating. Similarly, sole traders and other unincorporated partnerships and companies will have very little information, due to the same reason.

Limited companies and public limited companies will tend to have a lot of information on their credit reference. Included in the document are the credit rating and limit, identification and contact details. There will also be comprehensive financial data and a summary of any CCJs against the company.

A credit reference is therefore a very useful tool which allows you to judge whether or not to trade with a company.

Credit Reference from checkSURE

You can now save the time and hassle of waiting for a company credit reference by purchasing it online. checkSURE's database covers all limited companies within the UK, including sole traders and unincorporated partnerships and companies. You can search for the company using checkSURE's free company search and purchase the credit reference online. The reference will be generated on payment and placed within your own personal portfolio.

Full credit reference on any company starts at just £9.95, so click here to purchase your credit reference.

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