What is a business credit assessment, and what is it based on?

A credit assessment is an overall assessment of a business's financial strength, payment ability and risk picture. It is used to say something about the probability that the business will meet its obligations — based on real data from accounts and registries, not subjective judgements.

It is typically based on financial figures, equity and solidity, liquidity, payment history, debt ratio and an industry-adjusted risk assessment. No provider publishes their exact formula, but the broad factors are well-known and predictable.

No, but they are connected. A credit assessment is the assessment or classification itself. A credit report is the complete document containing and explaining the assessment — credit score, financial data and risk picture — in a format that can be used formally in tenders and decision-making processes.

No. A credit check is the process of retrieving and looking at a business's credit status — a lookup point. A credit assessment is the underlying analysis and classification that the credit check reveals. The terms are sometimes used interchangeably, but they refer to different things.

To make safer decisions. Whether it concerns giving a new customer deferred payment, entering a partnership, participating in a tender or evaluating a supplier — a credit assessment provides an actual basis rather than gut feeling.

If you need formal documentation of a business's credit status — for example for a tender or an internal risk assessment — choose the credit report. If you need to check a specific business directly, see the business credit check.