A credit check can determine a customer’s ability to pay and thus prevent defaults. If a check reveals that someone has a history of not following through on payments, the merchant has various options for dealing with the situation. They include limiting the available payment options or completely rejecting the transaction. By performing checks up front, the merchant seeks to improve the odds of doing business with financially sound clients.

Various data are examined to analyze a subject’s creditworthiness. These can be available internally, in other words in the merchant’s own shop, or obtained from external sources, and may include:

• Personal data
• Payment history
• Debt collection data
• Bankruptcies
• etc.

A scoring method is often used to derive a dependable assessment from the data and prevent defaults. The check can be performed in seconds during the ordering process, for example.

To learn which data have been stored on them, every person has the right to carry out a free self-check. This is possible at various credit agencies.