Some people handle rejection better than others, but it’s never fun to be told that your application was rejected. Whether that’s a job application, a college admissions application, or even a credit application on Fiado.
However, rejection is part of life and sometimes it needs to happen. In the B2B credit world, rejecting a customer for credit can be a delicate situation. In most cases, the person/company you are rejecting has done business with you and now you need to tell them that they have been deemed unworthy of receiving credit terms.
Rejection decisions can come from many different reasons, but the most often cited reason is a lack of strong references. And for good reason, too. When you are applying for credit, you get to choose a few of the best vendors you have a credit relationship to vouch for you. To most established businesses, this is easy to do because you likely have credit accounts at dozens or even hundreds of vendors. For new companies with a short history, this becomes very difficult.
It’s the like the old saying of “to get a good job, I need experience, but I can’t get experience if no one gives me a job”. In these cases, you need to remain a cash customer and prove over time that your purchasing history is deserving of a credit account. Over time, you can build your credit history with multiple vendors and before you know it, you might actually have a solid lineup of credit vendors who you can list on your next credit application.
Fiado is all about making credit applications easier, faster, and more reliable. One ways we help companies establish strong credit is that we encourage stacking, or accumulating, credit references. Each time you apply for credit and are approved, you had to have listed a few references to be able to be approved. But why only list the same references on your next application when you can add that new credit vendor as a reference? As you complete more and more applications and continue to get approved, you can easily have double or triple the number of solid references than industry average.
Why does this matter? The more vetted references, the more leverage you have as a credit applicant, meaning that you are more likely to be able to get the credit limit that you need. Vendors would love to safely be able to extend you as much credit as you need because that translates to more sales. If they have confidence you will pay, they are more willing to take the risk.
