Before extending credit to a regular customer, the business should check the customer’s credit report to minimize the risk. This is an important step to ensure that the customer is capable of repaying the credit, regardless of their previous history with the company. While having a history with the customer is valuable, it does not guarantee future payment reliability. Checking the credit report provides a more comprehensive view of the customer's current financial situation.
A business regularly extends credit to customers for large purchases with a standard interest rate of 5 percent. There is also a $200 installment fee that is added to the total cost of the purchase. What should the business do before extending credit to a regular customer?
Responses
Ask the customer the monthly payment they can afford.
Check the customer’s credit report to minimize the risk.
Nothing since the customer has a history with the company.
Require the customer to tell the business about any existing debts.
1 answer
1 answer