Credit and Supplier Control
What is a Credit Score for Businesses?
See what a credit score means, what information can affect it, and how to use it when evaluating customers and suppliers.
2 min read · Translated from Norwegian. Read the original
A credit score is a standardised assessment of the likelihood that a customer or company will meet its payment obligations. The score simplifies the interpretation of large amounts of information but is not a guarantee of payment.
What influences the credit score?
Models vary between providers. Common factors include annual accounts, profitability, liquidity, equity, payment history, registered payment remarks, company age, industry, and changes in management or ownership. A score must therefore always be presented alongside its data foundation, date, and explanation.
How to use the score
Use a credit score as one signal in a broader assessment. Check recent financial figures, roles, encumbrances, announcements, and the extent of the commitment you are planning. In cases of high risk, a business may consider advance payment, shorter payment terms, a credit limit, or security.
Do not uncritically compare figures from different models. A high score from one provider may use a different scale than another.
Credit information and privacy
When conducting credit assessments of individuals and sole proprietorships, personal data may be involved. The requester must have a legitimate need and a valid legal basis for processing. Proffi should clearly distinguish between public company information, its own risk model, and information from an approved credit reporting agency.
On Proffi
Display the score, risk level, last updated date, key drivers, and historical development. The user should be able to navigate from the score to financial statements, payment signals, and sources – not just receive an opaque figure.
Sources
Frequently asked questions
- Is a credit score the same as a payment remark?
- No. A payment remark can be included in the assessment, but the score is based on multiple pieces of information.
- Can a credit score change?
- Yes. New financial statements, payment events, and company changes can affect the assessment.
- Is a low score an automatic rejection?
- No. The business should establish its own credit rules and consider the amount, security, and customer relationship.