How do you treat this: A vendor listed as a trade reference by an applicant indicates their customer has a credit limit of $100,000, a high credit of $50,000, and a balance due of $10,000. The applicant wants a $100,000 line of credit. Is this a $100,000 reference or a $50,000 reference?

Answer: It is a $50,000 reference. The vendor can only let you know the applicant’s track record on payments of $50,000 or less. The vendor in question has no experience with larger amounts. The key is to make certain you have creditors that have extended credit to the applicant for at least the same dollar amount they have requested from you. In this case, your goal will be to get at least three references that have experience extending credit of $100,000 to the applicant. If all of the references provided come up short, be more specific. Ask the applicant for a list of creditors with whom they have or have recently had open account balances in excess of $100,000.