Understanding Credit Risk

• Introduction to Credit Risk
• Accuracy of data

Introduction to Credit Risk

Assessing the credit risk and payment history of new customers, and monitoring current ones, enables you to confidently manage credit terms and minimise exposure to bad debt. A DueDil Credit Report tells you how likely it is that a company will become insolvent in the next twelve months, rates company creditworthiness, and provides a recommended credit limit.

To get a report on a company, navigate to the Credit Risk tab and select the button.

The report will last for 30 days, but you can refresh it in the meantime in case you see new relevant information appearing on that company on the Dashboard.

You can also view company Mortgage information on the Credit Risk tab.

Once you've generated a report, you'll see the credit score and credit rating, and a summary of CCJ and Payment information.

The higher the score, the healthier the company and the lower the credit risk:

• 100 - 71 (Very Low Risk)
• 70 - 51 (Low Risk)
• 50 - 30 (Moderate Risk)
• 29 - 21 (High Risk)
• 20 - 1 (Very High Risk)

Secondly, a set of graphics will show you how the score compares to companies in the same region, in the same industry, of the same age and of the same size.  This provides context and allows you to benchmark the score.

A full Credit Health History of the company's credit ratings and limits follows, allowing you to track the stability of the company over time.

A breakdown of any CCJs against the company follows, allowing you to understand if there are any pressing liabilities against the company.

Payment data helps you to understand how likely the company is to pay its invoices in time.

The commentary section provides a plain text summary of the information in the credit report, showing the reason for the risk level assigned to the company.  

Accuracy of data

New credit report data is calculated every time there are recorded changes at the business. Each credit score change is accompanied by an explanation of the factors that influenced the change. An updated credit report becomes available for downloading as soon as a new credit score is calculated.

 Not all companies have credit scores, and here is why...

There can be a number of reasons why a company doesn’t have a credit score, including insufficient information, a company being too young or it being in a certain state (i.e. companies in dissolution, or in liquidation, and companies that are non-trading or dormant will not have credit scores).