7 Mistakes You’re Making In Your Credit Applications


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7 Mistakes You’re Making In Your Credit Applications

Many companies are stuck in the Dark Ages when it comes to credit applications. That is, they email Word Docs or PDFs that their customers then struggle to fill out. They then spend hours chasing down vendor or bank references via fax numbers. 

Those applications eventually end up lost on someone’s hard drive, or worse, in a dusty filing cabinet in a corner of an unused office.

If that’s you, then you’re most likely overcomplicating things. Again and again, we see that companies can make their lives much easier, and save time and money by taking a few simple steps. Take a look to see if you’re making any of these seven common mistakes in your credit applications.

  1. Paper and Email Credit Applications are More Likely to Have Errors. Simply put, mistakes -- even simple innocent mistakes like typos -- are more likely to take place on paper and email applications than on digital credit applications. If you’re then transposing those fields from paper to a spreadsheet or another system, you’re increasing your chances even more of introducing more errors. Remember, credit applications are a legally binding contract. Accuracy matters.
  2. You Think Your Credit Application is About You. This is perfectly natural since you’re the one creating it. But the reality is that your credit application is actually about your customer. The easier it is for them to fill out the form, the more likely you are to get accurate and timely data. View your credit applications from your customers’ eyes, but of course, get all of the information you need to assess risk.
  3. You’re Wasting Time With Paper and Email Credit Applications. Digital credit applications take just a few minutes to create and customize. You can send your application out to your customers with just a click of a button. Nectarine Credit encrypts all of your data and stores it securely. You can monitor and request credit application updates from your customer with just the click of a button. Did we mention our service is free to start
  4. You’re Not Getting Timely Bank Data on Your Customers. Your customer has filled out your credit application and they’ve returned it to you. You’ve forwarded your request on to your bank to get more information on your customer. And then you wait. And wait. And wait. Nectarine Credit offers instant bank balance data so you don’t have to wait.
  5. You Haven’t Updated Your Credit Application or Terms in Years, or Maybe Longer. Commercial credit applications should be reviewed and updated a few times a year. Businesses change, the economy changes and laws change. Review the questions you’re asking of your customers and have your legal team review your Conditions of Sale and Credit Terms.
  6. Your Credit Applications Are Still Relying on Fax Machines. It’s the 21st Century and that’s probably why your customers’ vendors and their bank never faxed you back any information on your customer. While there are some sectors that still rely on faxes, including healthcare and some government agencies like the US Department of Corrections, credit documentation via fax is not necessary anymore. In fact, many banks and businesses won’t handle credit applications via fax anymore, yet many credit applications are still requesting documents via fax.
  7. You Haven’t Asked Current Customers to Fill Out a New Credit Application Recently. Yes, even current well-paying customers should fill out a new credit application once every two years -- at the very least. Once a year is even better. Businesses change and the economy changes. A check-in is necessary to compare the first application with a more recent one.

While we hope that your company’s credit applications are in tip-top shape, it can’t hurt to revisit them and do a quick check of the most common mistakes companies are making in their credit process. Here at Nectarine Credit, we have a free-to-start digital solution to solving most of these mistakes.