A new buyer wants to open an account and pay in 30 days. Before you say yes, you are about to lend them the value of the order, and you should know as much about them as a bank would. Knowing how to check a business credit profile is not complicated, it takes an hour or two per account, and it is the single habit that separates brands that get paid from brands that spend their winter chasing invoices. This guide walks through what to ask for, where to look, what the signals mean, and how to turn what you find into a credit limit you can actually enforce.
Why you check before the first order, not after
Once you have shipped on terms, your leverage is gone. The buyer has the product, you have an invoice, and if they pay late or not at all your options are slow and expensive. Checking first costs you a couple of hours; not checking can cost you the whole order. It also sets the tone: buyers who are used to being checked respect a supplier who does it, and buyers who object to a routine credit application are telling you something.
This is separate from qualifying whether a buyer is a good fit for your product, which how to qualify a wholesale buyer covers. A store can be a perfect fit and a poor credit risk at the same time.
Step one: the credit application
Everything starts with a short form the buyer fills in. A good wholesale credit application asks for:
- Legal business name, trading name, address, and how long they have been operating
- Business structure and the state where it is registered
- Owner or principal names
- A resale certificate or tax ID
- Bank name and a contact for a bank reference
- Three trade references: other suppliers they buy from on terms
- The credit limit and terms they are requesting
- A signature agreeing to your terms, including late payment consequences
The wholesale application form covers how this fits into your wider onboarding. The credit section is the part that matters here, and a buyer who will not complete it is a buyer you sell to on prepayment.
How to check a business credit report
The application gives you names; now you verify them.
Commercial credit reports. Business credit bureaus, such as Dun & Bradstreet and the commercial divisions of the consumer bureaus, sell reports on companies. A report typically shows how long the business has existed, how it pays other suppliers relative to terms, any liens, judgments or collections on record, and a score or rating. Reports on small independent stores are often thin, which is itself information; reports on chains and distributors are usually detailed. The cost per report is modest against a first order of any size.
State business registry. Every state has a searchable registry of registered businesses. Confirm the legal name matches the application, the entity is active and in good standing, and the registration date lines up with how long they say they have operated. A business that does not appear, or appears as dissolved, is a stop.
Public records. Court and lien searches, often available through the same bureaus or through county records, show whether other suppliers or the tax authorities have had to chase the business.
Bank reference. With the buyer's permission, the bank will usually confirm how long the account has been open and give a general indication of the balance range. It will not give specifics, but a very new account for a business that claims a long history is a mismatch worth asking about.
Trade references: the check that actually tells you how they pay
The credit report says how a business paid in the past. Trade references say how it pays right now, to suppliers like you. Call them; do not just email. Ask:
- How long have you sold to them?
- What terms do you give them, and what credit limit?
- Do they pay within terms, and if not, how far outside?
- What is the largest balance they have carried with you?
- Would you increase their limit if they asked?
Two things to remember. The buyer chose these references, so they are the best three suppliers the buyer has. If even the hand-picked references describe slow payment, expect worse. And a reference that will not say anything beyond confirming the account exists is a soft warning.
The signals that matter most
Weigh what you find rather than ticking boxes. In our experience these matter most for a wholesale buyer:
- Payment behavior with other suppliers. The strongest predictor of how they will pay you.
- Time in business. A store that has survived several years has paid its bills through at least one slow season.
- Consistency across sources. Names, addresses, dates and ownership should match between the application, the registry and the report. Small inconsistencies are usually sloppiness; large ones are a reason to stop.
- Liens and judgments. Recent tax liens or supplier judgments are serious.
- Request size versus footprint. A single store asking for a credit limit far larger than a typical opening order is asking you to fund its cash flow.
- Online presence and reviews. Not a credit signal exactly, but a store with an active site, current social posts and recent customer reviews is operating. A store whose last visible activity is a year old may not be.
Turn the check into a credit limit
The point of the check is a number: how much you will ship on terms before they have to pay. A simple approach for a new account:
- Set the opening limit at roughly one typical order, or slightly above, so they can reorder once before the first invoice is paid.
- Tie the terms to the limit: net 30 on the first orders, with net 60 only after a clean history if a larger buyer insists.
- Review after three paid invoices. If they paid on time, raise the limit toward what their trade references carry. If they paid late, hold or lower it.
- Write the limit into your account records and enforce it. A limit nobody checks at order time is not a limit.
For the first order from a buyer with a thin or mixed profile, ask for a deposit or prepayment and offer terms on the reorder. Wholesale payment terms covers that toolkit. Do the same for a great buyer whose order is simply too large for you to carry.
A worked example
A boutique chain with four locations applies for net 30 with a 5,000 dollar limit. The state registry shows the company active for six years under the name on the form. The credit report is moderately detailed, shows no liens, and indicates payments generally within terms, with one supplier reporting a period of slower payment two years ago. Two of the three trade references say the chain pays in about 35 days on limits around 4,000 dollars; the third confirms the account but declines detail.
The brand approves net 30 with an opening limit of 3,000 dollars, enough for a typical first order plus a partial reorder, and sets a review after three invoices. The chain pays each within about 35 days. At the review the brand raises the limit to 6,000 dollars. Total time spent on the check: about ninety minutes, against a first-year account worth tens of thousands of dollars.
Keep checking
A credit check is a snapshot. Retailers hit hard times, ownership changes, and a great payer can become a slow one in a single season. Watch the days-to-pay on every invoice, re-run a report annually on your largest accounts, and treat the first late payment as a prompt to call, not a nuisance to wait out.
Checking credit only matters once buyers are applying for accounts, and that starts with reaching the right ones. WholesalePilot finds the distributors, chains and independent stores that fit your product, verifies their buyer emails, sends the outreach in your name and books the calls, so the accounts you are vetting are ones worth the effort.
Every order on terms is a loan. Check the borrower before you fund it.
Paste your product link and see the buyers who would open an account, free. Start here.