8 Questions To Ask, When Comparing Corporate Credit Tools

How to Judge Bankruptcy Model Prediction Accuracy When Comparing Corporate Credit Tools

In recent years, there’s been an explosion of new credit decision tools and technologies in the risk management marketplace. You may be reevaluating which third party tools are right for your company.

Choosing the right credit management solution starts with asking the right questions.  Each tool has its own unique strengths. While we can’t tell you which is right for your corporate credit challenges, we can suggest some questions to ask, as you evaluate your options.

8 Questions To Ask, When Comparing Corporate Credit Tools

As a start, consider the eight questions below:  

1. Does the credit service provide all the information you need to make decisions? Exactly what information will be at your fingertips? Will you have easy access to complete financial information such as liquidity and leverage ratios, credit agency ratings, the Altman Z-score, and more?  

2. How accurate is the credit risk score that is provided? Does the service provide a proprietary credit risk score? What is the reliability of the risk metric? How is the accuracy validated?

3. Is the database global? Does the tool show global industry risk, and show where your customers stand in relation to their international industry peers?

4. Will it help strengthen your partnership with sales? Will the credit risk information help you identify when you need to come up with creative credit limit solutions for financially distressed customers? And, will it help you review and increase credit limits when things improve?

5. Can you create and download user friendly, customized reports quickly and easily? Providing reports that help to show financial risks to your management is important for every credit department. How easy is it to customize the reports your boss needs?

6. How will this credit management tool alert you to growing risks? Credit risk isn’t managed unless it’s monitored. Will the service alert you to a customer or suppliers’ changing prospects, so you can anticipate situations and mitigate risk exposure on a timely basis?

7. Does this tool or service provide actionable insights, based on your actual trade data? When you contribute your company’s trade, what special reports are available to help you manage your portfolio risk: receivables at risk, hidden slow payers, other? Does the tool make it easy to get customized portfolio risk data?

8. What kind of testimonials and reviews does this credit tool get? Any company can say great things about itself … but what do other credit professionals think of the value of the service? Do they say it’s a good value for the money?  How’s the customer support?

FRISK® Predicts – Accuracy Scorecard

Making better credit decisions, and reducing risk, starts with asking the right questions.  And, we’re happy to stand on our record.

CreditRiskMonitor's proprietary FRISK® score is proven 96% accurate in predicting U.S. public company bankruptcy during this time horizon.

How can we be so sure of the accuracy? We measure it. See how the score is performing. In short – it identified 100% of U.S. public company backgrounds within a 12-month horizon.

See how our predictive risk scoring model measures up: Download the FRISK® Predicts Scorecard

About CreditRiskMonitor

CreditRiskMonitor is a financial news and analysis service designed to help professionals stay ahead of public company risk quickly, accurately and cost-effectively. More than 35% of the Fortune 1000, plus thousands more worldwide, rely on our commercial credit reporting and predictive risk analytics for assessing the financial stability of more than 56,000 global public companies.

At the core of CreditRiskMonitor’s service is its 96%-accurate FRISK® score, which is formulated to predict public company bankruptcy risk. One of four key components calculated in the FRISK® score is crowdsourced subscriber activity. This unique system tracks subscribers' patterns of research activity, capturing and aggregating the real-time concerns of what are essentially the key gatekeepers of corporate credit. Other features of CreditRiskMonitor’s service include timely news alerts, the Altman Z”-Score, agency ratings, financial ratios and trends. CreditRiskMonitor’s network of trade contributors provides more than $150 billion in trade data on their counterparties every month, giving them visibility into their biggest dollar risks.