Credit check

A credit check is a lookup on a current or prospective customer/debtor that a company can perform to assess the debtor's creditworthiness. The credit check is used to provide a picture of the debtor and their financial situation.

A credit check basically consists of one or more searches in different registers or different sources - this could be accounting information, salary information or similar.

This means that a credit check is not necessarily one action, but can consist of a large number of predefined checks in different registers. It depends on the company's wishes.

However, most people do credit checks in a debt register such as RKI (formerly Ribers) or our own Qatchr.

What is a credit check used for?

The credit check is used to get an overview of the customer's financial situation so that the company knows how much credit to give a customer.

The financial situation check is used to assess whether a customer should have long credit on their payments, short credit - or maybe even no credit.

The credit check is also used by banks to assess whether they want to lend money to the customer. If the check is negative, the bank will typically reject the customer or make special demands associated with the establishment of the loan; higher establishment costs, higher interest rates or similar.

How can a credit check affect a customer?

A credit check can have a big impact on a customer relationship between a company and a customer - or a bank and a customer.

The credit check often forms the basis for the customer relationship and the terms of the customer relationship. Does the company even want you as a customer? What terms can you get? And what payment terms can you get?

These are all things that can affect relationships, both in a B2C and a B2B business.

The credit check can therefore also have major consequences for the individual customer - and whether the company wants to do business with them at all.

When do you run a credit check?

There are basically no guidelines for when you as a business should run a credit check.

Many companies only check the customer's finances when the person or company becomes a customer for the very first time. This can often be a good idea, as it allows you to create a picture of the customer's circumstances - and thus create your credit policy and payment terms based on this.

Ofte viser det sig, at kundens økonomiske forhold ændres over tid, og dermed er ét enkelt kredittjek ofte ikke altid nok.

We recommend that you create a policy for when and how often you credit check your customers - and that you do it regularly. This could be every time the customer makes a purchase from you, every month, every six months or at other relevant intervals.