What use is a credit score?

What use is a credit score?

We normally think of credit scores being used by banks and mortgage companies when we want to borrow money from them. They are also used by companies supplying goods and services to their customers without advance payment. As Poweri provides design services to other companies, we often credit check them to decide if we’re prepared to provide a credit account and how big an account we’ll allow.

Credit scoring a business gives an indication of its financial strength, its ability to pay its bills and the likelihood of failure with outstanding debts. But if you’re the customer should you really care about the company you’re buying from? If you’re buying a solar PV system from a company such as Poweri we would argue that, yes, you should care.

All MCS / RECC contractors must offer an insurance backed workmanship warranty and that any deposits paid are also insured until the work is complete. So you are protected to an extent. However you’re buying a system that should last 25yrs or more, which means there are likely to be times when you have queries or components fail and so you’ll need help or advice. Even if the components that fail are still covered by the manufacturer’s warranty you still need your original contractor to organise the components’ replacement. If your original installation contractor is no longer in business you could face difficulties getting things resolved. So how can you tell if the contractors you are talking to will still be around in a few years time?

Credit scoring would help but without the necessary facilities you won’t be able to credit score Poweri or any of the other contractors you’re talking to. So we thought it would be an interesting exercise to do it for you. We’ve selected all of our competitors from the MCS website within a 10 mile radius of Poweri and ranked them by credit score and the results are given in the table below. Poweri is equal 3rd out of 19, with a score of 80 which Experian describe as “Below Average Risk”. It would be unprofessional to name names but you can see most of our competitors are rated as “Above Average Risk”, “High Risk” or “Maximum Risk”. Clearly this is only an indication and a snapshot in time so the picture can change, but we think still a valid consideration.

 

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The next question is how did Poweri get such a good credit score? We don’t know the details of Experian’s methodology but we think it’s because we’ve not tried to grow excessively by being aggressive with our pricing or expansion plans. To put it bluntly we’re not greedy and we’re not in business to get rich quick. We think we offer a very good product at an honest price and through that philosophy we’ve grown steadily but without needing to borrow from the bank or use large credit accounts to do so. We also pay our bills quickly and we’re careful about who we do business with. One common reason businesses fail is they grow too rapidly, over-extend themselves and then the slightest problem can bring the house of cards tumbling down. We’ve built Poweri on strong foundations as we intend to be here for many years to come and to be here to support you for the life of your system.

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