A credit assessment is typically delivered as a score between 0–100, indicating the creditworthiness of a person or a company. It is an important part of the decision-making basis for businesses that want to evaluate whether to offer a loan or sell goods or services on credit.
When used correctly, it helps reduce the risk of losses from customers who fail to pay, and increases the likelihood of recovering outstanding debt. You can read more about what a credit assessment is here.
A legitimate need gives a company the right to perform credit assessments of individuals and businesses to evaluate whether to grant credit or loans. Credit assessments are primarily regulated by the Credit Information Act, which sets guidelines for the processing and disclosure of credit information.
Companies may conduct credit checks on their customers, whether individuals or businesses, when selling on credit. Examples include when a customer applies for a loan, signs up for a subscription, or enters into agreements that involve the extension of credit.
When credit information about an individual is disclosed, a notification letter must be sent free of charge to the person who has been credit assessed. This letter must include the information that was disclosed, as well as details about the company that performed the credit assessment and their contact information.
Bislab’s systems ensure that this notification letter is automatically sent to the correct recipient after a company has conducted a credit assessment of an individual.
Want to learn more?
If you’re wondering how your business can start using credit assessments today, contact us at hei@bislab.no for more information on how we can help.
