Upsales uses a credit rating system to help guide you on the probability of a company going bankrupt within the next 12 months.
This article covers:
The credit rating
Go to Sales & CRM → Customer portfolio → Risks tab to view ratings:
The Risks tab requires the Company Data Hub add-on.
The rating is a numerical representation of a company's financial health and stability, based on a statistical model.
It falls on a scale from 1 to 100.
A higher number indicates a lower risk of bankruptcy. A lower number suggests a higher risk.
This rating is a valuable tool for assessing the financial viability of your customers and investment opportunities.
Risk Categories (A–E):
Ratings are placed into risk of bankruptcy categories.
These represent a certain risk forecast:
-
Category A: Scores 80-100
Very low risk (0,0001 - 0,2526%) -
Category B: Scores 60-79
Low risk (0,2526 - 0,8658%) -
Category C: Scores 40-59
Moderate risk (0,8658 - 2,9231%) -
Category D: Scores 15-39
High risk (2,9231 - 12,3937%) -
Category E: Scores 1-14
Very high risk (12,3937 - 100%)
These categories help you understand the risk associated with a company based on its credit rating.
The Risk prognosis for bankruptcy column shows the percentage range of the company's category. When an exact probability of bankruptcy is available for the company, the column shows that percentage instead.
Special Cases (Category F = No Assessment):
Some companies may have events or circumstances making it impossible for us to provide a credit rating.
These events include:
- Bankruptcy
- Liquidation
- Reconstruction
- Distraint
- Bankruptcy application
- Dissolved
- Delisted
- Not active
In these cases, we categorise the company as "F" and assign a rating of 0.
This indicates that we cannot assess risk of bankruptcy for these companies. They may already be in the process of bankruptcy or have ceased operations.
Other non-assessable events (category "Other")
Other events preventing us providing a credit rating include:
- Missing data
- Auditor missing
- CEO missing
- Deficiency in financial statements
- Debt balance
- Financial statements missing
- And several other events...
For companies with such events, we categorise their credit rating as "Other,"
This means we cannot assign a number or category. These companies are subject to unique circumstances that prevent a standard assessment.
Companies without a credit rating
Upsales retrieves credit ratings for active limited companies that are linked to Prospecting. The company must be a headquarters, in a country where credit monitoring is available. If a company has no credit rating, the Risk prognosis for bankruptcy column shows the reason:
- Not active in Upsales: the company is inactive in Upsales.
- Not a limited company
- Not updated against Prospecting: the company is not linked to Prospecting.
- Not a headquarter
- Credit monitoring not available for the company's country
- Credit rating missing in Upsales: it can take up to 1 hour for a credit rating to be retrieved, or no credit rating was found for the company.
The statistical model
The credit rating is determined by a statistical model tailored to the type of company.
This model takes various factors into account, such as:
- Payment remarks
- Financial health
- Board composition
Weighing these factors against each other gives you a comprehensive and data-driven assessment of credit rating.
The rating system and risk categories are designed to provide you with the information needed to assess the financial health of potential partners or investment opportunities accurately.
Whether you're looking to engage in a business partnership or invest in a company, having a clear understanding of credit rating will support your decision-making.