Credit is an anchor for businesses in both good and bad economic times. As most companies know, the use of credit inquiries (also known as bank references) to determine a customer’s creditworthiness is essential in mitigating risk and avoiding financial pitfalls.  

While one would assume credit inquiries are handled digitally given today’s technological advancements, the truth is many creditors are still relying on outdated manual processes that are painfully slow and involve emails, phone calls, or even faxes to financial institutions. 

Unfortunately, the credit inquiry process is often so antiquated and frustrating that credit managers avoid it altogether and instead pursue alternative means of uncovering financial information, without vetting it fully with a financial institution. A risky move, to say the least.  

But what if there was a way to digitize the credit inquiry process from start to finish and ensure credit managers get the quick and accurate responses they need? There is – and it provides credit managers with a guaranteed response, usually within a matter of hours.  

To understand the full picture, let’s take a look at what a credit inquiry is, why it is important, and how online confirmations can transform outdated processes.  

What is a credit inquiry?  

A credit inquiry or bank reference is an indicator of a potential customer’s future ability to meet payment obligations based on real-time financial insights. It also helps lenders verify that customers are who they say they are.  

Commercial credit inquiries are requests, sent by business managers, to verify details of a commercial bank account. Responses help establish a client’s credit valuation before extending terms on a sale. Requests can include account type, balance in relative terms, opening date, and number of days overdrawn.  

What are the benefits of a credit inquiry?  

A credit inquiry or bank reference reduces risk for the lender by providing a thorough financial background check before extending credit—especially in high-risk, high-value opportunities. While not required, a credit inquiry is a proactive action that helps companies extend a reasonable amount of credit and prevents the headache of missed payments. The knowledge gained from a bank reference has the potential to uncover warning signs of financial distress, which is critical in making informed credit decisions. It’s a more complete process than using trade references alone and doesn’t require significant investment.  

For example, it is widely known that extending business-to-business (B2B) credit in the construction industry comes with a certain amount of risk, due to factors like market volatility, changes in material costs, and labor shortages. This means credit professionals must use all the tools at their disposal to verify financial data and proactively identify signs of financial trouble before extending credit. 

Managing these credit inquiries by fax, mail, or email is a time-consuming, disorganized, and unreliable process – until now.  

How can I simplify the credit inquiry process? 

Online financial verifications are a key digitization trend happening with financial institutions, which bodes well for credit managers who need quick answers.   

A digital confirmation platform can help credit managers quickly and easily verify financial data, including bank references, ensuring your company has the right information before extending credit.   

Thomson Reuters® Confirmation provides a secure, cloud-based solution that enables credit managers to digitize their credit inquiries, resulting in improved response times, reduced errors, and saved staff time. Our security safeguards exceed industry standards and keep customer data safer than it would be if it were faxed, emailed, or given over the phone.  

When you send a request through Confirmation, you’re guaranteed a response from thousands of financial institutions, including 50 of the top 100 banks in North America. 

Used by 7,800 credit managers and more than 4,000 financial institutions around the world, Thomson Reuters Confirmation exceeds industry standards, passes hundreds of security audits each year, and complies with regulatory standards. And because banks prefer receiving your requests through Confirmation, their responses are faster when you do. 

With a centralized dashboard, Confirmation organizes your work in one place online. Say goodbye to faxing and filing. Everything you need is now at your fingertips. Ready to experience a fast and accurate online bank reference process and guaranteed responses within in a matter of hours? Request your free demo here.