We have developed a system to rate the credit risk of our members’ business partners for effective accounts receivable and credit management. This is called the Creditreform Solvency Index.

The Creditreform Solvency Index is made up of a combination of 15 features (mathematical algorithms) and a combination of characteristics from financial reports and industry-related comparative values, which vary in weightings.

The risk analysis is marked from 1 to 6. The rating of the credit risk is displayed as a three digit figure. The figures correspond to the current marking system (from 1 = very good to 6 = insufficient). The second and third figures allow for an exact differentiation of our rating.

The characteristics are as follows:

By means of the marking system it is easy to recognise various classifications in the financial report. This is how the order situation and trend of affairs form a scale from very good (10) to bad (60), company and business development is read respectively as expanding (10) to heavily declining (60). The same goes for the breakdown of the mode of payment – from cash discount (1) to recorded negative characteristics (6) - and the credit opinion - from unobjectionable recommendation (1) to strict refusal (6).These and other weighted characteristics contribute to the calculation of the credit risk.

Based on the automatically calculated credit line, individual maximum credit limit requests are answered. For this purpose, in addition to the solvency index, other factors are taken into consideration, such as the company’s size, the annual turnover and the company’s suppliers and credit situation.

Besides these factors, a normative credit assessment is made by the researcher as a result of his extensive analysis of the information.

The Creditreform Solvency Index enables you to make a quick and concise judgement about the creditworthiness of your business partners.

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