Crefo Score –
simply explained

Key facts at a glance:

• The credit score index from the business information agency Creditreform is often referred to as the Crefo Score.

• The Crefo Score is a type of point scale where the values represent a company's creditworthiness.

• A company's credit score index is usually consulted when service providers, suppliers, financiers, or insurers are evaluating cooperation with new clients.

What Does Crefo Score Stand For?

The credit score index from the business information agency Creditreform is often referred to as the Crefo Score. It is a benchmark for creditworthiness, i.e. the credit rating of companies, for example.

However, the term should not be confused with "CrefoScore". This is a special product from the agency — software that can be used to automate credit risk management. This article deals exclusively with the Crefo Score as a credit score index.

What Does the Crefo Score Indicate?

The credit score index from the business information agency is a type of point scale with values ranging from 100 to 600. These values represent a company's creditworthiness.

A Crefo Score of 100 reflects excellent creditworthiness, whereas a score of 600 is equivalent to a payment suspension.

The score is always paired with a percentage figure that represents the probability of payment default. A low score always corresponds to a low default probability — whereas a likely payment default is accompanied by a high credit score index.

How Is the Crefo Score Determined?

The agency Creditreform regularly obtains business information about companies from various sources. These include, among others:

• Commercial register and debtor register entries

• Balance sheets, annual reports of companies

• Payment experiences of customers, supplier inquiries

• Creditreform data from balance sheet analyses and receivables analysis

• Payment experiences of Creditreform customers, debt collection proceedings

This information is weighted and the credit score index is calculated using mathematical-statistical methods.

For the probability of payment default, according to Creditreform, various criteria are also used: order situation, revenue, number of employees, and industry risk.

The calculation methods are continuously updated and refined to reflect structural changes in the economy and evolving default risks in individual market segments.

What Is the Crefo Score Used For?

A company's credit score index is usually consulted when service providers, suppliers, financiers, or insurers are evaluating cooperation with new clients.

However, the indices are not only consulted in the context of new contracts or projects. This also occurs when a relationship with an existing partner has been dormant for some time and needs to be refreshed. Or when a customer's payment behaviour suddenly changes.

The Crefo Score functions as a kind of benchmark and forecasting tool that helps assess how reliably a customer will pay. In addition, the Crefo Index also provides indications of whether a company could currently be in difficulty — usually with a very high score.

The index is also regularly used in the lending decisions of financiers and banks. It can therefore well be a criterion for whether a company receives a loan and under what conditions.

The Crefo Score is not the only credit score index that stakeholders can rely on. There is a whole range of further indices from other business information agencies.