Offering Credit to New Customers
By
Paul and Sarah Edwards
Q: How do I determine if a customer is creditworthy?
A: Offering credit to a new customer almost always
prompts concern. The last thing you want is to provide goods or
services for which you don't get paid. Here are three things
you can do to make sure you don't get burned:
1. Check credit references. People who don't have
credit problems will not object to supplying credit references.
When checking references, ask about payment history, prompt payment
and if there have been any collection problems. Users of Microsoft
Word 97 and later can download credit application templates for
free at http://office.microsoft.com.
2. Learn more from the major credit bureaus. Go to the
"Business Services" or "Business Solutions"
sections of Equifax, Experian or Trans-Union to check an individual's
credit.
3. Consider products and services from D&B.D&B offers a number of
products, including the Small Business Risk New Account Score, a
way of rating new companies; the Payment Analysis Report, which
provides an analysis of a company's payment history over the
past year; and the Business Information Report, which provides an
assessment of how much credit you should extend to the company. For
instantaneous results, check out D&B's Global DecisionMaker
service.
If a company or individual has no credit history, or if what
they have is unfavorable, tell them you'll consider granting
credit only after successfully doing business with them over a
period of time.
Authors and career coaches Paul and Sarah Edwards' new
book isThe Best Home Businesses for People 50+.
Send them your questions at www.workingfromhome.com or in care of
Entrepreneur.