Until recently vendors had access to three typical forms of credit check. A new system now exists to fill the gaps common to these outdated systems.
A bit of due diligence on customers in the form of routine credit checks can save a lot of headaches and stress later on.
In the oil and gas, construction, and trucking industries there are there are three main types of credit checks used to help predict if your customer is reliable.
Credit Reports
In Canada there are three major credit bureaus. These credit bureaus get their information from lenders and collection agencies. The information fed into their systems is highly regulated and verified.
The amount of scrutiny can result in a slow feedback loop and those giving the feedback may not be relevant to your industry sector. The reports contain a lot of data which for me, is mostly useless.
Costs vary depending on plan, data requested, etc. A credit report can cost as low as $35 for a single search if you are set up with a user license, and as much as $300 and up.
These reports are a one and done type approach. If you want to check on a customer at a later date you will have to purchase another report.
Reference Based Credit Application/Trade References
The vendor has the customer fill out a form with references of other vendors that customer has done business with. The vendor must reach out to the vendors on this list to get feedback on the customer reputation.
Information comes straight from other vendors. Whether or not they are in the same orbit can vary and no customer generally asks for a reference from an unhappy vendor.
While there is no financial outlay for this type of check, there is a significant time and effort commitment. Get the application filled out, contact other vendors, digest the feedback, etc.
Like the credit report, this is a one and done system. It does not look at your customers on an ongoing basis.
Call a Friend
You call other vendors in the same industry that have worked with that customer. You are getting ‘on the street’ feedback relevant to your business.
Reliability of the information is relative to your relationship quality with the other vendors you reach out to. Information will be as up to date as the experiences of the other vendors.
There is no dollar cost with this method. Time and effort is dependent on how much chit chat is needed to get the required information.
Again, this is a one time thing. To check up on a customer later on involves having to phone around to get the latest feedback or gossip.
There are limitations with all three methods. These include not being able to monitor existing customers, excessive time to complete, and lack of relevant information. Now, a new system has been launched to solve these limitations.
PayScore.ca
Scoring systems are used everywhere these days. They are easy to use, easy to understand, fast and effective.
PayScore takes the timeliness and relevant information you get with ‘Call a Friend’ and expands on it.
The system is fast. You can do a lookup in less than a minute.
The system allows you to monitor existing customers. It is not generally the first time customer that burns you. It is someone that was good until they are not.
If you ask the following about your customers:
- How long do they take to pay?
- How hard are they to invoice?
PayScore.ca answers these in a way that is fast, affordable, and easy to understand.
Learn More About Payscore Here
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