Credit Policy for businesses and how to extend credit and manage credit risk

Once you decide your business needs a credit policy, you will have credit applications available for all your customers to complete. 

How can you make these applications work for your business?

Make sure the applicants print clearly and press down, most applications are carbon.

When you check their credit be sure they have consistently used their full name on your application and with the entities you are checking with. Such as their bank, job or credit cards. This means, if they only use their middle name or middle initial sometimes, you may want to do some more checking. I have also run across people who will switch their middle name with their last name to avoid someone finding out about some bad credit history they may have had.

Check to be sure they budget and have paid their bills on time.

Ask any lenders if they have ever had a situation where they have not or could not pay on time.

Review your credit applications and customers credit regularly.