Thank you for your letter of 9 February in which you asked to change your terms of payment to settlement by banker's draft on quarterly statements.
We are taking up the reference you offered, and provided it is satisfactory you can consider the new arrangement effective from your next order.
Asking about credit rating
The guide below gives you an outline on how to take up references and to ask about a company's credit rating.
Say who you are and why you want the information. Make it clear that the name of the company you are writing to has been given to you as a reference by your customer. (If this is not the case, you are unlikely to get a reply - see 8.7.1.)
We are a furniture wholesalers and have been asked by L.R. Naismith & Co. Ltd. of 21 BarnsleyRoad, Sheffield to offer them open account facilities, with quarterly settlement terms. They have given us your name as a reference.
As you will see from the letter heading, we are a glass manufacturers and have recently begun to export to the UK. D.R. Mitchell & Son, who are customers of yours, have placed an order with us, but want to pay by 30-day bill of exchange, and informed us that you would be prepared to act as their referees.
Your branch of the Eastland Bank was given to us as a reference by I. T.S. Ltd. who have placed a substantial order with us, but want to settle by 40-day draft. As we are a Yugoslav company, we have little knowledge of British companies and their credit ratings.
Say exactly what you want to know.
We would like to know if the firm is credit-worthy and has a good reputation. We would be grateful if you could tell us if the firm is reliable in settling its accounts promptly.
Could you let us know if this firm is capable of repaying a loan of this size within the specified time?
Could you tell us if the firm has a good reputation in your country; whether they can be relied on to settle promptly on due dates; and what limit you would place or have placed on credit when dealing with them?
If the amount of credit is known, it is usually mentioned.
The credit will be about £2,000.
We do not expect the credit to exceed £500.00.
The draft is for £226.00.
It is unlikely that they will ask for more than a £1,000 credit at this stage.
Thank the firm in advance for giving you the information, and tell them you will reciprocate if the opportunity arises. Also let them know that whatever they say in their letter will be treated in the strictest confidence.
We would like to thank you in advance for the information and can assure you that it will be treated in the strictest confidence.
Your help will be appreciated, and the information will be held in confidence. We will return the service should the opportunity arise.
You can be sure that the information will not be disclosed. Thank you for your assistance, and we will reciprocate in a similar situation in the future.