Business Insights Credit Management
3 mins read

Why is a business credit history so important?

Credit History

Looking at the past can help you determine trends of the future – but sometimes the past can come back to bite you. A company’s credit history can make or break its ability to secure credit and conduct business.

Acquiring the credit history of businesses provides valuable insights that can help protect your business. This assists you in achieving a comprehensive view of an entity’s creditworthiness. A business credit check is a great way to understand which businesses to avoid and which to deal with. If an entity has poor credit history and business credit score, that’s a red flag to consider not doing business with them.

Using credit history to predict the future 

By understanding past performance – including whether an entity repays its loans within the agreed upon terms and on time – you have a better picture of future performance. By using this past credit report behaviour, you can identify patterns and trends to make informed credit lending decisions.

Allowing you to see the credit history of any Australian business, CreditorWatch credit reports provide you with intelligence to help with your business decision making. The information you are provided helps you establish whether you will take on a new customer and review your current ones.

The credit report reveals any previous court actions, payment defaults, mercantile enquiries, insolvency notices, administrator or liquidator appointments, winding up notifications and ASIC information.

RiskScore, another credit management tool from CreditorWatch, allows you to perform your due diligence by providing you a comprehensive business credit score. RiskScore uses credit history, tradeline data from over 55,000 CreditorWatch customers, business demographic risk data and traditional credit risk drivers to assess credit risk.

The most predictive business credit score on the market, RiskScore utilises sophisticated machine learning technology to make smarter business decisions. Predicting a business’s likelihood of default in the next 12 months, RiskScore gives you a numeric value of 0-850. The higher the number, the lower the entity’s credit risk. What’s more, RiskScore provides you with a riskiness rating from A1 to F to better categorise the business’s creditworthiness.

Payment Predictor uses payment history to predict future payment behaviour. This credit management tool shows how a business compares payment trends in relation to others in its industry. If a business is slow in comparison to others in their industry, this is a key indicator that they have poor payment habits. Any deteriorating payment behaviour or late invoices is a sure sign of a credit risk.

Helping you to protect your business’s cash flow, Payment Predictor shows you an entity’s payment history which includes payment history and the average number of days that they take to pay their bills.

Through Payment Rating you can identify a company’s financial stats compared to the industry’s average. Scanning business-to-business transactions, this innovative tool measures the time it takes for a business to pay their suppliers. This insight gives you the information to understand clients’ payment reliability. CreditorWatch uses ABCDE rating scale, making it easy to understand a clients’ potential to pay on time based on their past behaviour.

Gain valuable insights and make data-driven decisions with CreditorWatch 

With our innovative suite of credit management tools, we help you understand which businesses to avoid and which to deal with.

With valuable insights from our credit history checks, you can achieve the broadest view of an entity’s creditworthiness. Contact us for a free trial and streamline your credit management today.

business credithistory
Michael Pollack
Head of Media & Communications
Michael joined CreditorWatch in July 2021. He has more than 20 years’ experience in business journalism, marketing and communications strategy and digital content development. He is passionate about communicating to the business community how CreditorWatch’s product suite can help them grow and protect their companies.
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