Credit Check Checklist

Before you start

A credit check is only as good as the identifiers you feed it. Confirm exactly which legal entity you are checking before you spend a cent, because checking the wrong ABN tells you nothing useful.

• The customer's exact legal name, ABN and, for companies, the ACN.
• Consent to run a credit check if your application or terms require it.
• A budget rule for when a paid report is justified by the limit requested.
• Your risk thresholds so a score maps to an action, not just a number.

Step 1 — Start with the free sources

1. Confirm the ABN and GST status on ABN Lookup.
2. Check the ASIC register for company status, directors and any deregistration or strike-off action.
3. Search the PPSR to see whether other creditors already hold security over the business's assets.
4. Search the relevant court lists for judgments or winding-up applications against the entity.
5. Do a plain web and news search for the business and its directors.

Step 2 — Buy a credit report when it counts

1. For a meaningful credit limit, order a commercial credit report from a recognised bureau.
2. Read the credit score, payment-default history and any adverse listings.
3. Check for court actions, mercantile enquiries and links to other failed entities.
4. Look at the trend, not just the number — a falling score matters more than a static one.
5. Keep the report on file with the date you pulled it.

Step 3 — Turn the result into a decision

1. Map the findings to your risk bands: approve, approve with security, reduce the limit or decline.
2. If you decline credit, offer prepaid or cash-on-delivery rather than losing the customer entirely.
3. Where the score is borderline, take a guarantee, a deposit or a PPSR registration to offset the risk.
4. Record the decision, the limit and the evidence behind it.
5. Diarise a review date so the limit is reassessed as the relationship matures.

Common mistakes

• Checking the trading name instead of the legal entity and getting a clean but irrelevant result.
• Relying on a score alone and ignoring the payment-default detail behind it.
• Treating an old report as current when the business's position has since changed.
• Skipping the PPSR, then discovering a prior creditor outranks you when things go bad.
• Failing to record the basis for the decision for the next reviewer.

A layered check beats a single source every time. The Merion tools help you organise the inputs, and a free debt appraisal is available if a checked account still slips into arrears. This is general information only, not legal or financial advice.