Trade Reference Check Checklist
A focused routine for checking the trade references on a credit application — calling suppliers who have given the customer credit and getting straight answers about how they pay.
What this checklist covers
- Reach genuine trade referees, not related parties
- Confirm the referee really extends the customer credit
- Extract specific facts about limits and payment behaviour
- Weigh the answers into your credit decision
6 min
Before you start
Trade references are the closest thing to a preview of how a customer will pay you. The value is in calling real suppliers and asking specific questions, not collecting tick-boxes. Prepare before you dial.
- The trade referee names and contacts from the application.
- A consistent question set so answers are comparable.
- The limit and terms you are weighing for this customer.
- Somewhere to record each conversation.
Step 1 — Reach a genuine referee
- Confirm the referee is a supplier that has extended the customer credit, not a friend or related entity.
- Verify the referee's business independently if anything looks off.
- Reach the person who actually handles the customer's account.
- Be cautious if the only referees offered are connected to the customer.
- Aim to speak with at least two independent referees.
Step 2 — Ask specific questions
- How long has the customer had an account with you?
- What is their credit limit and what terms are they on?
- Do they pay within terms, or do you have to chase?
- Have any payments been dishonoured, or promises broken?
- Knowing what you know, would you keep extending them credit?
Step 3 — Weigh and record
- Note tone and hesitation alongside the literal answers.
- Compare what each referee says for consistency.
- Cross-check the references against the credit report and application.
- Factor the references into your limit and any security requirement.
- Record who you spoke to, the date and what was said.
Common mistakes
- Never calling the referees the customer listed.
- Accepting related-party referees who only give praise.
- Asking yes-or-no questions that reveal nothing useful.
- Brushing off a referee's clear hesitation.
- Leaving no record of the conversation for the next reviewer.
A few sharp reference calls can save a costly bad debt. Use the Merion tools to keep your checks organised, and a free debt appraisal is there if a customer still defaults. This is general information, not legal advice — handle any personal information appropriately.
Key takeaways
- Only independent trade referees give an honest preview
- Ask specific questions about limits and payment behaviour
- Read hesitation as carefully as the words themselves
- Record each call so it can be relied on later
Frequently asked questions
How is a trade reference different from a credit report?
A credit report is data-driven and historical; a trade reference is a current, human account from a supplier who deals with the customer now. The two complement each other — numbers plus lived experience give a fuller picture than either alone.
What if a referee will not answer my questions?
Some businesses limit what they share for privacy reasons, so a guarded response is not always a red flag. But evasiveness specifically about payment behaviour, when they will discuss everything else, is worth weighing into your decision.
Can I rely on trade references alone?
It is unwise to. References are useful but can be cherry-picked by the customer. Pair them with a credit check and entity verification so your decision rests on several independent sources, not a couple of friendly calls.
Work the checklist, then get paid
Use the free Invoice Generator, then let Merion recover anything that goes unpaid — commission-only.