Debt history

A debt history is basically an overview of a debtor's debt items - both current and historical.

Debt histories can take many forms and often range from a simple list of open debtor records to a complete purchase history - with both open and closed debt items and recorded payments.

Debt history can either be viewed in a dedicated credit system or loan system - or in the company's finance and ERP system, where it is often possible to pull a complete purchase and payment history.

If you have access to a credit check system, there are some systems that also show the debtor's debt history.

Why is debt history interesting?

A debt history is extremely valuable to you as a creditor - and the longer and more comprehensive it is, the better your data base.

Debt history gives you a historical and thus empirical insight into the customer's previous payment behavior - and is therefore particularly relevant in connection with credit assessment, credit checks and the final credit approval.

In other words: Debt history is not a theoretical discipline like many other benchmarks and KPIs can be - it is based on actual data and provides a strong basis for assessing your customers' creditworthiness.

There are a number of systems that can analyze purchase, trade and debt histories to support your assessment and analysis of the customer - based on actual historical data.

Where can I see the customer's debt history?

If your company has an ERPor accounting system, you often have the ability to view your customers' debt history - both in terms of open items and a more detailed historical insight.

With larger ERP systems such as Business Central or e-conomic, it is often relatively easy to get an overview of customer history, including payments, purchase patterns and much more.

This is probably the best place to get a complete overview of your existing customers' debt history.

However, if you want to investigate the debt history of new customers - customers you haven't dealt with before - it can be more difficult.

There is no single database or centralized record of your customers' debt history. But with a credit check tool and access to debt registers, you're well on your way.

Debt history and debt registers

If you haven't dealt with a customer before, you don't have an internal debt history on them - so you can't use it as part of your credit rating.

Fortunately, there are tools and services for credit checks - including Collectia's own tool, Qatchr.

Qatchr gives you access to a wide range of information about your customers' financial situation - for example, what assets they own that are registered. Qatchr can also tell you if the customer is registered in a debt register, giving you an initial insight into their debt history.