Credit Applications- Do I need them?

Most SME’s who extend credit to their customers want to know who they are dealing with and the use of credit applications continues to be a valuable tool in preventing debts turning bad.

The benefits of having your customer complete one are numerous as not only will they provide trade references and complete contact information but they are also a great way to vet them, and any resistance on their part to complete one should be seen as a warning sign.

Customers with nothing to hide and only honourable intentions generally have no problem completing one. The credit application should include a section where a next of kin is nominated as this information could prove vital if communication with your debtor is lost.

Whilst being pleased at signing up a new customer is normal and certainly encouraged, we must not lose our objectivity and thinking worst case scenario is often the best mindset to be in when it comes to being precautionary.

Customers who refuse to complete a credit application should be asked to explain their reasoning and often it is because they feel it is unnecessary or demeaning.

The best response to this is to explain that it is simply company policy and remind them that most credit providers whether it be a bank, credit union or even a video store require one.


Credit Applications- Do I need them?

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