Credit Risk Scorecard Template
A simple scorecard turns a gut feel about a customer into a repeatable number — this template lets you weigh the factors that matter and set the limit and terms accordingly.
What's included
- A points-based scorecard you can adapt
- The risk factors worth scoring
- How to translate a score into a limit and terms
- How to keep the scorecard honest over time
6 min read
Why score credit risk
A scorecard makes credit decisions consistent and explainable. Instead of 'this one feels fine', you have a score built from the same factors every time — trading history, references, financial signals and the size of the request. It also lets you tier your response: low risk gets standard terms, medium risk a reduced limit, high risk cash-up-front.
The template below is a starting point. Adjust the factors and weights to your industry, then apply it uniformly.
The scorecard template
Score each factor, total, then map to an action.
CREDIT RISK SCORECARD — [Customer]
Factor Score (0-5)
Years trading ____
Entity type / stability ____
Trade references quality ____
Credit report / defaults ____
Days-to-pay history (if any) ____
Request size vs your capacity ____
Industry / sector risk ____
TOTAL: ____ / 35
Action mapping (adapt thresholds)
28-35 Low risk -> standard terms, full limit
18-27 Medium risk -> reduced limit, monitor
10-17 High risk -> small limit or cash up front
0-9 Decline / cash onlyHow to use it
Score every new account, and re-score existing accounts at review time, using the same factors so results are comparable. Feed the inputs from your credit check checklist and trade references straight into the card.
Treat the thresholds as a guide, not a straitjacket — a low score on one factor (say, a winding-up notice) can override a decent total. Sense-check the limit a score suggests against your cash position with the Merion tools.
This is general business information, not legal advice.
Tips
- Score the same factors every time so customers are rated consistently.
- Map scores to actions — standard terms, reduced limit, or cash-only.
- Let a single severe red flag override an otherwise decent total.
- Re-score existing accounts at review so ratings stay current.
FAQ
Is a scorecard better than judgement?
It makes judgement consistent and explainable, and it scales across staff. Keep room to override on a serious red flag.
How do I set the weights?
Start with equal weights, then adjust to reflect what actually predicts bad debts in your industry over time.
Should I re-score existing customers?
Yes — at each review. A customer's risk changes, and a stale score can leave you over-exposed.
Templates are a head start — not legal advice
Customise to your business and have important documents reviewed. Need to recover a debt? We can help.