What Factors To Consider When You Increase The Credit Limit Of A Customer

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In earlier article, we have said that we need to inform the customers of their credit limits. As time pass or when the customer requests higher credit limit, what should we base on to increase or decrease his credit limit? 

Append below are some of the major factors to consider when setting up a higher credit limit: 

• Customer’s track record in terms of payment-prompt, average, slow or very slow?
• Volume of current business
• How is the industry and economy moving
• What collateral if any is available –additional guarantees, letter of credits?
• What is the volume of business of other competitors
• Credit limit of competitors
• Other market information
• What are his other business activities and how it is developing