Customer scoring (Z-Score, behavioral, financial)

Customer scoring assigns a score to each customer to estimate their risk of late payment or default. It may be based on financial data (balance sheets, Z-Score), actual payment behavior, or a combination of both.

Example

A customer receives a rating of 2 out of 10: weak financials and frequent delays. The company reduces the customer’s credit limit and requests a down payment. A customer with a rating of 9 continues to enjoy flexible terms.

Why It’s Important

Credit scoring helps determine who to sell to on credit, how much to sell, and who to follow up with first. It is a fundamental part of credit management.

For more information: the practical guide to smart customer scoring and customer risk management.

See also: Z-Score, behavioral scoring, financial scoring, Aston AI scoring.