What is Credit Estimate
Want to be able to make a reliable estimate of your customer's creditworthiness? With Credit Estimate you will know in no time how your potential customer is doing. The name gives it away, it is a tool that predicts the creditworthiness of a business owner. To do this, it uses the credit history, current financial situation and expected income of the entrepreneur. Credit Estimate works fast and simple. Entrepreneurs link their transaction data and can instantly see their credit score. Complicated and lengthy processes are therefore no longer necessary. This allows you to help your customer faster without having to do a lot of work.
What does Credit Estimate exactly mean?
In general, Credit Estimate is a financial term used to describe the creditworthiness of a person, company or other entity. This estimate can be made in several ways. Examples include historical data and financial statements.
Before providing financing, it is very important to know the entrepreneur's ability to repay the financing. This gives both the entrepreneur and the platforms clarity and speeds up and simplifies the process. With Credit Estimate, you know exactly what the Probability of Default is. In other words, the probability that a customer will not be able to meet their payment obligations in the next 12 months.
How does it work?
With Credit Estimate, platforms easily request a credit score and cash flow analysis of their customers. This is based on a PSD2 connection. Based on their credit score, customers receive an indicative offer within minutes. The process usually looks as follows:
- The entrepreneur visits your platform and starts an application
- The platform invites the entrepreneur for Credit Estimate
- The entrepreneur shares transaction data from the past 3 to 18 months via PSD2 linkage
- Then the entrepreneur gives permission to share the credit report with the platform and of course receives a copy himself
The benefits for platforms and entrepreneurs
Credit Estimate has benefits for both platforms and entrepreneurs. Platforms no longer need to analyse annual figures thanks to full automation. The probability of default is accurately calculated within minutes because of this automation.
Entrepreneurs benefit greatly from Credit Estimate. It helps them find out early whether they qualify for financing or not. A good credit score means they can qualify for a lower interest rate on financing. Other big pluses of Credit Estimate are its simplicity and transparency. In fact, no annual figure needs to be provided and business owners decide on the data sharing. Within minutes, they receive an indicative offer.
The benefits of offering Embedded Services as a partner
All benefits summarized: