The importance of the score in granting credit
Posted: Sun Jan 19, 2025 10:06 am
Every day, thousands of companies check their customers' scores to avoid bad deals. Together with the Positive Registry , the score determines the credit rating of individuals and legal entities, a number that corresponds to purchasing and payment power. The higher the digit, the lower the chances of defaulting on payments in the next 12 months.
This data is extremely valuable for those who sell on credit or carry out high-risk financial transactions. Therefore, if your company grants credit but does not check the customer score, it is time to change your approach.
Default in Paraná
Little by little, default rates are showing signs of slowing down in Brazil. Between September and October of this year, for example, the rate fell by 3%, according to Boa Vista . But here in Paraná, the overseas chinese in australia data
is different: in the year to date, the number of defaulting consumers has increased by 3.7%. This means that entrepreneurs in Paraná need to pay extra attention when granting credit – and checking their credit score is one way to avoid this problem.
What are the consequences of default?
There's no escaping it: Every company has defaulting customers, including yours. When you make a sale on credit, your customer may, at some point, stop paying the bill, either through pure forgetfulness or unforeseen circumstances.
It is up to your company to determine what an overseas chinese in australia data default rate is and to adopt measures to keep it under control.
Without this monitoring, your company's financial management will be impacted, as will its entire future.
Among the main consequences of default we have:
Impaired strategic planning
All efficient strategic planning requires financial predictability. With defaults out of control, the management team will not be able to define action plans or goals properly.
Working capital affected
Defaulting on payments directly affects the business's working capital, that is, the financial resources used to keep the company operating. When we stop receiving payments from our customers, this important source of funds is affected.
Business evaluation made difficult
Is the business sustainable or does it need to change course? Is it overseas chinese in australia data to make new investments or is it a good time to save money? These are just some of the questions that remain unanswered when defaults are not under control.
What can be done to reduce default?
Some measures can be taken to keep defaulting under control, including checking a customer's score before closing a sale.
In the following section, we discuss this strategy in more depth. In the meantime, here are some other practices you can adopt:
Use your own database
Many customers have already purchased your product or service. Did they make all payments in the most appropriate manner and on time? What patterns are repeated? What are the extreme cases?
Analyze your own database to identify potential deficiencies and opportunities for improvement in your sales and billing processes.
Count on the support of technology
Automation also plays an important role in controlling defaults.
Firstly, because of the customer history record, as we saw earlier. Secondly, because automating collection processes gives your team greater agility. Automatic SMS and/or email sending, for example, saves time and resources that would otherwise be spent on traditional, and sometimes inefficient, methods.
This data is extremely valuable for those who sell on credit or carry out high-risk financial transactions. Therefore, if your company grants credit but does not check the customer score, it is time to change your approach.
Default in Paraná
Little by little, default rates are showing signs of slowing down in Brazil. Between September and October of this year, for example, the rate fell by 3%, according to Boa Vista . But here in Paraná, the overseas chinese in australia data
is different: in the year to date, the number of defaulting consumers has increased by 3.7%. This means that entrepreneurs in Paraná need to pay extra attention when granting credit – and checking their credit score is one way to avoid this problem.
What are the consequences of default?
There's no escaping it: Every company has defaulting customers, including yours. When you make a sale on credit, your customer may, at some point, stop paying the bill, either through pure forgetfulness or unforeseen circumstances.
It is up to your company to determine what an overseas chinese in australia data default rate is and to adopt measures to keep it under control.
Without this monitoring, your company's financial management will be impacted, as will its entire future.
Among the main consequences of default we have:
Impaired strategic planning
All efficient strategic planning requires financial predictability. With defaults out of control, the management team will not be able to define action plans or goals properly.
Working capital affected
Defaulting on payments directly affects the business's working capital, that is, the financial resources used to keep the company operating. When we stop receiving payments from our customers, this important source of funds is affected.
Business evaluation made difficult
Is the business sustainable or does it need to change course? Is it overseas chinese in australia data to make new investments or is it a good time to save money? These are just some of the questions that remain unanswered when defaults are not under control.
What can be done to reduce default?
Some measures can be taken to keep defaulting under control, including checking a customer's score before closing a sale.
In the following section, we discuss this strategy in more depth. In the meantime, here are some other practices you can adopt:
Use your own database
Many customers have already purchased your product or service. Did they make all payments in the most appropriate manner and on time? What patterns are repeated? What are the extreme cases?
Analyze your own database to identify potential deficiencies and opportunities for improvement in your sales and billing processes.
Count on the support of technology
Automation also plays an important role in controlling defaults.
Firstly, because of the customer history record, as we saw earlier. Secondly, because automating collection processes gives your team greater agility. Automatic SMS and/or email sending, for example, saves time and resources that would otherwise be spent on traditional, and sometimes inefficient, methods.