Credit Assessment

Customer Credit Assessment is the process by which foreign trade enterprises investigate the credit status of new and existing customers and rate their risk, in order to decide whether to grant credit limits, payment terms (such as D/P, O/A), and credit periods. Usage scenarios include: when developing new customers, when existing customers request increased credit limits, and when market conditions deteriorate. Precautions: It is necessary to combine financial statements, bank credit certificates, third-party credit reports (such as D&B D-U-N-S Number), and historical transaction records; risk levels vary greatly among different countries, so reference should be made to the country risk reports of Sinosure (China Export & Credit Insurance Corporation); assessment results should be updated dynamically rather than being done once and for all. Difference from 'customer credit investigation': investigation is the act of information collection, while assessment is the process of analysis and decision-making; difference from 'credit insurance': assessment is an internal risk control measure, while insurance is an external risk transfer tool. Proper use can reduce bad debt rates, but being overly conservative may miss orders.