Before lenders can approve a loan, they usually run a credit check on the applicant. This is meant to determine the risk profile of the applicant as well as the best rate of interest to charge on their loan. Credit reports do not just contain the credit score and borrowing history of the borrower, they also have the registered phone numbers, emails, and addresses of the applicant. The same applies to Vietnam company reports.
Commercial lenders usually run a Vietnam company report to establish the risk profile of the company. In fact, suppliers also run these checks to confirm that the company they are supplying goods and services to is able to pay and has a history of paying their debts in a timely manner. Below are three things that can lower the credit score of a company:
i) Late Payments
Suppliers and lenders usually expect timely payments of their loans and invoices. Any delays in payments can be reported to credit referencing bureaus. This may lead to adverse listing. In case of a delay in loan payment, the lender will give you a few days to make up for the missed payments. If you still fail to pay, they will report you to credit referencing bureaus for adverse listing. For this reason, companies need to service their debt without any delays.
ii) Errors and Omissions
Credit scores usually rise and fall over time depending the financial situation of the company. Late and insufficient payments will lower credit scores while timely payments will boost the score of your company. To ensure you have the highest score possible, be sure to check the company credit report for any errors or omissions. Errors can have a huge effect on your score. After all, a lender might have forgotten to update a loan as paid. By having errors and omissions rectified, you can be assured of having a decent credit score.
iii) Bankruptcy
If you default on a loan, lenders can report your default. Since they still want to get back their money, however, they will take a further step of filing a bankruptcy petition against you. If they are successful in having your company declared bankrupt, the credit rating of your company will be damaged severely.
Since your company credit rating affects your brand reputation, you should do everything to ensure it is decent. This includes refinancing debt when you are unable to service them properly.
