When exporting goods or services to foreign buyers, it is important to understand whether your business’ buyers have the financial means to pay for the products they order. A foreign buyer’s credit report can help your business assess risks in your export transactions.
What is a credit report?
A credit report is a document created by a credit reporting agency that summarizes the financial history of a party (a person or a business). Examples of information found in a credit report include the amount of credit available to a party, how much of its credit limit a party tends to rely on for purchases, whether the party has a history of paying its bills on time and whether a party has previously gone through bankruptcy.
How can a foreign buyer’s credit report help me?
A foreign buyer’s credit report can be a useful risk assessment tool. Knowing the history of your foreign buyer's credit behavior can help you determine whether or not they are likely to be a reliable customer who pays on time and in full.
Seven Things Every Foreign Buyer Credit Report Should Have
- Name, address and the foreign buyer’s financial history
- Legal status and date of establishment of the foreign buyer’s business
- Description of foreign buyer’s business activity (distributor, wholesaler, etc.)
- Number of employees and the foreign buyer’s standing in its industry
- Trade references, commercial morality, pay history, and agency credit scores
- Financial condition, including past and current records
- Opinions and recommendations supported by a reasoned argument with specific financial, trading or debt collection items underscoring the opinion.
Can EXIM provide me with a credit report on my foreign buyer?
When applying for an export credit insurance policy with the Export-Import Bank of the United States (EXIM), businesses are generally required to obtain a credit report on its foreign buyer(s) from a credit reporting agency and submit the report as part of its application. With an EXIM Express Insurance policy, EXIM will obtain the necessary credit report for your business.
To learn more about EXIM application requirements or how to obtain a foreign buyer credit report, contact an EXIM trade finance manager.