Credit Check Checklist
Before you extend meaningful credit, a structured check confirms the entity exists, is solvent and pays its bills — this checklist makes sure you cover the bases every time.
What's included
- A complete pre-approval credit-check sequence
- Free and paid checks, and when each is worth it
- The warning signs that should stop an approval
- Where to record the result
6 min read
Why check before you ship
Once goods are out the door on credit, your leverage drops sharply. A credit check before approval is far cheaper than recovery afterwards. Scale the depth to the limit: a small account may need only entity confirmation and references, while a large limit warrants a paid credit report and a look at the company's filings.
The checklist below sequences free checks first, then paid ones, then the judgement call.
The credit check checklist
- Legal entity name and ABN confirmed on ABN Lookup
- Company status, directors and registered office confirmed on ASIC
- GST registration active (on ABN Lookup)
- Entity not deregistered, in liquidation or under administration
- Two trade references contacted and positive
- Online search for adverse news, court listings, winding-up notices
- Paid credit report obtained (for larger limits) — score, defaults, court judgments
- PPSR search to see existing security interests over the entity
- Director cross-check — prior failed companies?
- Result recorded against the account with date and approver
How to use it
Decide a dollar threshold in your credit policy above which a paid credit report is mandatory; below it, the free checks and references may suffice. Any sign of deregistration, liquidation, recent defaults or a director with a string of failed companies should stop the approval or push the account to cash-up-front.
Record the outcome on the account so there is evidence the check was done. If a checked account still defaults later, you can refer the debt with a clean file behind it.
This is general business information, not legal advice.
Tips
- Do the free entity and register checks on every account — they cost nothing.
- Set a limit above which a paid credit report is mandatory.
- Deregistration, liquidation or recent defaults should stop the approval.
- Check directors for a pattern of failed companies, not just the entity.
FAQ
Is a paid credit report always necessary?
No — scale it to the limit. Small accounts may be fine on entity confirmation and references; large limits justify a paid report.
What is a PPSR search for?
It reveals existing security interests over the customer's assets, which tells you how much is already encumbered ahead of you.
What should stop an approval outright?
Active liquidation or administration, recent unsatisfied defaults, deregistration, or a director with repeated company failures.
Templates are a head start — not legal advice
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