How to Check a Customer's Credit Worthiness Know the risks and what to ask before extending credit to your customers.
By Gwen Moran •
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Before banks extend credit, they verify the prospective borrower's credit history and ability to repay, among other things. That's not as common in the $2 trillion unsecured, or trade, credit market, says Alex Coté, vice president of marketing for Cortera, a credit-risk monitoring service in Boca Raton, Fla.
"I recently spoke with a woman whose business was running into trouble because she wasn't monitoring her customers' payments," he says. "Everything was very late--60 days or more. She didn't realize it. They were looking at layoffs and, really, the problem was that they weren't collecting."
