How do you fix the credit limits of the customers (Distributors, Dealers)

How do you fix the credit limits of the customers
(Distributors, Dealers)

Question Posted / chakravarthy

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How do you fix the credit limits of the customers (Distributors, Dealers)..

Answer / adarsh

• Trade References: After obtaining the trade references you can compare the amounts of the High Credits awarded to your customer

• Bank References: In doing a bank reference on your applicant find out the amount of line of Credit that was established by the applicant with the bank. If this line is unsecured then perhaps it can give you a little more comfort in setting a relatively higher credit limit for the applicant

• Agency Credit Reports: Credit Agencies generally give two pieces of information that are quite popular among credit professionals that aid in the setting of credit limits

• Financial Statements: Financial statements are also used in assigning Credit Limits to customers.

• Past Performance:: Credit Limit in this case is based on the past history of the customer as per the information contained in your books.

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