Credit Score – Improve your customer analysis with these 5 questions and answers
Posted: Sun Jan 19, 2025 9:36 am
One of the main factors to be observed during the sales process, the Credit Score determines the market score for individuals and legal entities .
The higher the indicator, the greater your customer's purchasing and payment power, and the lower their chances of default.
Does your company already use this data in queries? Below, we clarify the main vnpay database about the Score and how it can optimize the granting of credit to your business. Enjoy reading!
What is the Credit Score and how is it calculated?
The Score is the credit rating of individuals and legal entities, which ranges from 0 to 1,000 points. This tool indicates the chances of a customer becoming delinquent in the next 12 months. The higher the value, the greater the likelihood of the customer keeping up with their financial obligations.
The score considers factors such as:
Paying bills on time;
History of restrictions such as negative credit rating , issuing of bad checks or search and seizure actions;
Financial relationship with companies;
Updated registration data , among other information.
It is important to understand that the Score is just one of the indicators to be analyzed when granting credit. If the client is a legal entity, having access to data on the corporate structure and companies with interests can be a decisive factor. For individual clients, knowing the presumed income can help in finding the best installment rates. Therefore, having as much information as possible at hand is ideal.
What risk bands are customers divided into?
As we explained, each client analyzed will be assigned a score. The risk ranges presented by the credit bureaus are as follows:
Score 0 to 300: High probability of default;
Score 301 to 700: Average risk of the customer not fulfilling their financial obligations;
Score 701 to 1000 : Customers with good credit history and low chances of default.
How does this information impact Credit Analysis?
Analyzing the Score is a practice that is already part of the daily routine of many companies. The consultation is carried out whenever they need to make sales on credit, issue credit cards, grant loans or financing, for example.
With the support of this tool, you have a targeted view of your customer's actions in the market, making sales safer. But it is important to emphasize: the decision whether to grant credit or not must always be aligned between your financial and sales teams.
The higher the indicator, the greater your customer's purchasing and payment power, and the lower their chances of default.
Does your company already use this data in queries? Below, we clarify the main vnpay database about the Score and how it can optimize the granting of credit to your business. Enjoy reading!
What is the Credit Score and how is it calculated?
The Score is the credit rating of individuals and legal entities, which ranges from 0 to 1,000 points. This tool indicates the chances of a customer becoming delinquent in the next 12 months. The higher the value, the greater the likelihood of the customer keeping up with their financial obligations.
The score considers factors such as:
Paying bills on time;
History of restrictions such as negative credit rating , issuing of bad checks or search and seizure actions;
Financial relationship with companies;
Updated registration data , among other information.
It is important to understand that the Score is just one of the indicators to be analyzed when granting credit. If the client is a legal entity, having access to data on the corporate structure and companies with interests can be a decisive factor. For individual clients, knowing the presumed income can help in finding the best installment rates. Therefore, having as much information as possible at hand is ideal.
What risk bands are customers divided into?
As we explained, each client analyzed will be assigned a score. The risk ranges presented by the credit bureaus are as follows:
Score 0 to 300: High probability of default;
Score 301 to 700: Average risk of the customer not fulfilling their financial obligations;
Score 701 to 1000 : Customers with good credit history and low chances of default.
How does this information impact Credit Analysis?
Analyzing the Score is a practice that is already part of the daily routine of many companies. The consultation is carried out whenever they need to make sales on credit, issue credit cards, grant loans or financing, for example.
With the support of this tool, you have a targeted view of your customer's actions in the market, making sales safer. But it is important to emphasize: the decision whether to grant credit or not must always be aligned between your financial and sales teams.