Credit decision

A credit decision is a term used by companies that provide credit and loans when making decisions on specific matters regarding credit. This can include how much credit should be granted, how long the credit should run for and whether the credit should be granted at all.

In other words, a credit decision marks the start of the granting of a credit or loan - often based on information gathered about the customer prior to the credit decision.

Who makes a credit decision?

Historically, a credit decision was often made by the responsible salesperson, accounting or other staff with direct or indirect contact with the customer, such as a bank advisor.

The person making the credit decision usually followed a set of instructions, which could include checking if the customer was registered in a debt register or if the customer had previous arrears.

Today, however, we are seeing a growing trend of more automated systems taking over the assessment of customers. This moves the credit decision away from the individual salesperson or advisor to being made (fully or partially) automatically. This makes the work easier for the individual employee and often provides a much more detailed credit assessment, which provides a better basis for making a credit decision.

Why are credit decisions important?

All credit and debt carries a risk that it will not be repaid - either in full or in part. There can be many reasons for this, such as changes in the borrower's financial circumstances, bankruptcy or death.

Credit decisions therefore determine whether a credit relationship is good or bad and whether the company risks losing money on a debtor.

The right credit decisions can help avoid or minimize losses on debtors by managing who should get credit, how much credit should be granted and how long the credit should last.

Automated credit decisions

In the past, credit decisions were often made manually by salespeople, accountants or other employees who followed internal guidelines on who could get credit, how much and for how long. Today, we're seeing a growing trend of companies using digital services that can help automate credit decisions.

More companies are now using digital solutions that can automate or partially automate the credit decision process.

We recommend that you carefully consider whether you want the process to be fully automated or if it should simply be used as a tool to support the staff already working with credit decisions in your business.

Qatchr can help with credit decisions

Hos Collectia har vi udviklet vores eget værktøj til at foretage kredittjek, Qatchr.

Qatchr kan hjælpe dig med at kredittjekke privatpersoner og virksomheder – og lave kvalificerede bud på kreditters størrelse og anbefalede længder af kredit (kredittid) – ud fra din kunders oplysninger; nøgletal, regnskabsoplysninger.