Credit Associations

Many different credit associations exist to help credit industry personnel obtain information about their customers. Services offered by these associations include trade and consumer credit reporting, trade group administration, collections, asset liquidations and bankruptcy administration, and educational seminars. Most of these organizations are non-profit and function as a central clearinghouse for credit related information.

Trade Associations

Trade associations are comprised of vendors in a particular industry, such as furniture, lumber, or auto parts, selling to a common customer base. Trade associations usually meet periodically to share factual, historical information about common customers.

Many trade credit groups are organized and managed by a local Affiliates of the National Association of Credit Managers. Group meetings are overseen by a representative of the Association that acts as a moderator to ensure that members do not engage in any inappropriate conduct,  In particular, the Association's representative makes certain that no discussions stray toward inappropriate issues involving collusion among creditors with regard to any individual customer or type of customer.

Banking Groups

Like industry credit groups, banking groups also provide a forum for bank creditors to exchange factual information and experiences with other members who share a common customer base. These groups meet with varying frequency, and establish bylaws to avoid legal problems. (Bylaws are the rules that govern the actions of the corporation).  Educational activities, such as presentations by outside speakers, are often featured at meetings.

Educational Groups

Like industry credit groups, educational groups provide an opportunity for credit professionals at all levels of experience to meet and to learn about the credit and collections process through speakers and round-table discussions. These groups may have a broad focus or may specialize in certain subject areas or levels within the credit and collections profession. Other services credit associations offer include:

• Credit reporting,
• Third party debt collection,
• Employment services,
• Education,
• A newsletter,
• Temp help services,
• Credentialing tests

One final comment:   Give serious consideration to becoming active in one or more industry credit groups in order to gather information and insights about the payment habits [or payment problems] of customers and potential customers.  Use this information to establish credit limits, assign customers to specific risk classification, and to determine how to prioritize collection calls in addition to prioritizing your account follow up.

*Source: Credit Management: Principles and Practices, 2nd Ed., by Dr. Charles L. Gahala

Edited by Michael C. Dennis