What is a Credit Application?
A Credit Application is a document which is completed by your customer, the Credit Account Applicant. This form is the Applicant’s disclosure to you of their financial liquidity, and assists with your assessment of their capacity to service any debts incurred ‘on credit’.
What is the Benefit of a Credit Application to your company?
The form enables you to undertake a ‘Credit Check’ prior to any credit being provided by you. This will effectively help to reduce the number of bad debts and late payments that are accumulated by ascertaining ability to pay, before credit is given.
Where a Credit Application has been completed, same may be tendered as evidence of your agreement with the Applicant, should the account become a bad debt.
When should a Credit Application be used?
You should provide your Customer with this document to sign before any credit is provided by you for goods or services.