Scorecard

A scorecard is a term used when assessing the creditworthiness of customers - both private and corporate.

The scorecard can contain a number of parameters and conditions that a company wants to measure and look for before granting credit to a customer.

The purpose of a scorecard is often to standardize what the company wants to look for in a debtor, but also to give the opportunity to rate a customer on equal terms with other customers.

The scorecard will usually give an amount of points, a color or a completely different value - and based on that value give the customer the opportunity to get credit, borrow money or something completely different.

The scorecard can also be used more dynamically, so if the scorecard gives x value, it triggers y credit and z credit time. It is up to the company to define the scorecard policy.

Read also: Credit rating of private customers

Read also: Credit rating of companies

How to make a scorecard

No two scorecards are the same - and many companies look for different factors when rating their customers.

Generally speaking, private companies rarely use formalized scorecards, and if they do, they often have a very small scorecard - often with just one or two factors - such as a positive credit rating or positive equity.

Whereas banks and mortgage lenders, for example, often have very long and sophisticated scorecards - where factors such as credit ratings, number of times the customer has moved and where the customer lives can have an impact on how credit ratings turn out.

Our recommendation is that if you provide credit or loans to your customers, you should actively use a scorecard. This defines what is important to you - and what should be checked before granting credit or loans. The scorecard can be simple and expanded over time if the company finds it necessary to include more parameters and conditions.

For example, the scorecard could consist of a requirement for a positive profit (company), positive equity and a positive credit rating.

The scorecard and credit ratings

The scorecard is a great tool to gather the values, parameters and conditions that are in your desired credit rating.

The scorecard helps define what your credit rating should and must include - and helps guide the user through your credit policy if the scorecard gives x, y or z value.

The credit assessment and the scorecard become two sides of the same coin - helping to protect your business against bad payers, non-payments and defaulted loans and installments.

Indhente kreditoplysninger med Qatchr

Qatchr er en online kreditplatform, der giver dig mulighed for at foretage kredittjek af dine kunder; private og virksomheder.

I Qatchr er der indbygget en række forhold, som enten kan slås op en gang – eller abonneres på, hvis dette ønskes. Det kunne eksempelvis være navn, adresse, offentlige regnskaber og estimeret kreditmaks.

Qatchr also makes credit recommendations - how much and for how long you should extend credit to your customers. This can be used as an active scorecard - or as part of one.

Få en gratis og uforpligtende gennemgang af Qatchr allerede i dag – og kom i gang med at bruge kredittjek.