An applicant for open account terms is what I refer to as a dog. Among the 'highlights' are a previous bankruptcy, slow pay, several address changes, lawsuits filed by creditors, and creditors that have secured everything using the UCC method of perfection. The customer demands to know why they are not being offered open account terms. How honest should I be? How much can I tell them?

Answer: : I recommend telling the truth which is: "You do not qualify for open account terms based on our credit granting criteria." If you are asked for additional information, in my opinion it is an attempt at intimidation since the applicant obviously knows how bad their credit 'profile' looks to a potential creditor. If pressed for additional information, I would tell the applicant that their payment history with other creditors among other factors is one reason you are not prepared to offer them open account terms, but that you would be happy to review the decision from time to time.