In message , steve
robinson writes
>Mike_B wrote:
>
>> In message , steve
>> robinson writes
>> > For small business its very difficult to get a full up to date
>> > credit history on every potential customer often the cost of any
>> > report far outweighs any margins on the goods supplied ok if the
>> > customer is likely to bring in repeat business every month but
>> > total waste of time on one off sales. Take your average jobbing
>> > builder he may get 2 out of every 7 quuotes he does no way could he
>> > afford to credit check every possible client the margins wouldnt
>> > allow it , nor often the time scales.
>> >
>>
>> Again, I think I totally understand what you are saying, but I think
>> it boils down to the fact that the businessman looks at the job, at
>> the customer, at whether it is a one off or potential repeat, looks
>> at the numbers, decides if a credit check is worth it to him and if
>> he decides not to check, then he chooses to take a gamble.
>>
>> If he gives credit without any checks then that must surely be
>> because he has decided that the potential gain to his business from
>> that customer outweighs the potential loss in case the credit turns
>> out to be bad.
>>
>> If he does not believe that, then he should not offer the credit and
>> if he has taken that gamble, then he should stick to good practice
>> for gamblers and not gamble with anything he can't afford to lose.
>>
>>
>> > Its also amazing how devious people can be in hiding thier true
>> > credit worth
>> >
>> > I used to supply a company called sendo , they had offices all over
>> > the world , i stopped supplying them 12 months before they went
>> > bust on a gut feeling , i had performed a credit check (quite an
>> > intensive one) and they passed with flying colours , they went down
>> > for millions
>> >
>> > I have nothing but sympathy for anyone who ended up in debt
>> > because of illness or job loss but the large majority of those in
>> > debt now are in the position because of thier own foolishness ,
>> >
>>
>> I don't believe it is the large majority, but I accept that it
>> includes people who have just borrowed too much.
>>
>> > ultimatly all credit instituions rely on the honesty of the people
>> > asking for credit to give a true and fair appraisel of thier
>> > financial position unfortunatly many dont , it is very easy to
>> > subvert any credit reference agency
>>
>> I thought use of false information to gain credit was a criminal
>> offence and if we are talking about crime, then that's a slightly
>> different subject.
>>
>It is however very few financial institutions will bother going down
>this path , bad pr and of course the debt will still remain
>uncollectable and addional legal fees to boot
>
If it is criminal, then the creditor would not be paying for the
prosecution. If they choose not to report it because of bad PR, then
again they are taking a business decision based on their own projections
of potential risk v reward.
>> Credit reference agencies rely on facts, payment histories, amount
>> and number of debts, number of recent credit applications, payment
>> arrangements, recorded defaults, CCJs and bankruptcy, electoral
>> registers and so on.
>
>If you live in rented accomadation a quick change of address or name
>change will usally get you through all but the most vigourous credit
>checks ,
>
>I failed a credit check last year purely because i have very little
>credit history as an individual (i only applied because it was an
>interest free offer) I ended up having to get a bankers draft because
>they wouldnt even take a cheque of me ironic really , i own my house ,
>i have a successful small business , dont have the need for an
>overdraft .
>I was actually advised to take on some debt to get a credit history
>
Good advice to anybody who may want future credit. Having a nil credit
record is as bad as having a bad one, but only for the reasons we have
discussed. Those being, that a business may choose not to take a gamble
on someone who has no checkable history. Same goes for those who have a
new name and address and therefore no checkable credit history.
--
Mike_B |