Q. Explain about Credit-worthiness?

There are a numerous ways in which Fenton Security plc could ensure that customers are subjected to tighter credit appraisal checks before goods are supplied. The list below is indicative however not exhaustive and includes significantly more detail than would be expected of examination candidates:

Bank and Trade References

It is habitual to request a customer to give permission for a banker's reference to be sought and as well to name two to three current suppliers who may be willing to provide trade references. The difficulty related with both of these types of reference is that they cannot be relied upon as confirmation that a customer is creditworthy. A bank is improbable to give a customer a bad reference and the customer is not going to name trade suppliers with which they have a bad payment record.