What is a Global Credit Report Service?
At one time, companies only traded with those who were in the same town or were at the most separated by a few hundred miles.
The main method of travel was railroad or horse and messages could only be delivered by hand.
Early multinational companies like the Dutch East India Company took months to send messages to other countries.
During this time, it was a risk for a company to extend credit to anyone.
Accidents could easily happen such as sinking ships, burned buildings or flooded workshops.
There also wasn't any reliable credit reporting services to help provide useful information.
However, the global marketplace has changed.
Today, millions of businesses are located throughout the world including India, China, Europe and the United States.
Banks and financial institutions do business across borders and use email, fax and video teleconferencing to communicate instantly.
The world has truly become a much smaller place.
Despite these advances, there are some challenges that businesses still need to consider.
The biggest challenge is in determining if a company is going to pay their bills on time or if they are going to default and cause a big financial problem.
The risks for a company are high and disastrous results can happen when extending credit to financially unstable companies including bankruptcy.
The Importance of Credit Risk Management Thankfully, there are global credit report services to help companies today.
At a cheap price, businesses can get accurate information about prospective accounts or partners.
For example, consider a credit risk manager working for a microelectronics firm in the Netherlands.
The company wants to sell millions of process control devices to another company in Shanghai, China.
However, the Chinese company is going to be paying on credit.
If successful, this can be a major deal for both companies.
Nevertheless, there is a risk that the Chinese company can default on payment, causing the Netherlands company to face financial hardships.
The only way for the Netherlands company to evaluate that risk of the Chinese company is to get professional assistance.
So that a company gets the vital information they need, you want to have a close relationship with a sound global credit report service.
What to Consider So what do you need to consider when choosing a credit report agency? There are five professional factors that all business credit report services should have.
The main method of travel was railroad or horse and messages could only be delivered by hand.
Early multinational companies like the Dutch East India Company took months to send messages to other countries.
During this time, it was a risk for a company to extend credit to anyone.
Accidents could easily happen such as sinking ships, burned buildings or flooded workshops.
There also wasn't any reliable credit reporting services to help provide useful information.
However, the global marketplace has changed.
Today, millions of businesses are located throughout the world including India, China, Europe and the United States.
Banks and financial institutions do business across borders and use email, fax and video teleconferencing to communicate instantly.
The world has truly become a much smaller place.
Despite these advances, there are some challenges that businesses still need to consider.
The biggest challenge is in determining if a company is going to pay their bills on time or if they are going to default and cause a big financial problem.
The risks for a company are high and disastrous results can happen when extending credit to financially unstable companies including bankruptcy.
The Importance of Credit Risk Management Thankfully, there are global credit report services to help companies today.
At a cheap price, businesses can get accurate information about prospective accounts or partners.
For example, consider a credit risk manager working for a microelectronics firm in the Netherlands.
The company wants to sell millions of process control devices to another company in Shanghai, China.
However, the Chinese company is going to be paying on credit.
If successful, this can be a major deal for both companies.
Nevertheless, there is a risk that the Chinese company can default on payment, causing the Netherlands company to face financial hardships.
The only way for the Netherlands company to evaluate that risk of the Chinese company is to get professional assistance.
So that a company gets the vital information they need, you want to have a close relationship with a sound global credit report service.
What to Consider So what do you need to consider when choosing a credit report agency? There are five professional factors that all business credit report services should have.
- The company's database should have global outreach with millions of companies.
You can't get useful information if the company isn't in the database. - The company should have good customer service.
Ideally, representatives should be fluent in all major languages and be available twenty-four hours a day, seven days a week. - The company should be known for quality.
All the reports from the company should be accurate, fair and easy to read. - The company should also offer follow-up.
Business credit reports can become outdated.
Therefore, a good company tracks changes and notifies you of any changes that can affect you. - The prices should be reasonable with no required up-front fees.
You are going with a credit reporting service in order to save money when choosing business partners.
Therefore, a credit reporting service should charge a fair price without requiring you to have a long-term commitment.
