How toRun a Credit Score Check in Xero?

Before you even think about running a credit score check, make sure your Xero subscription includes the Credit Management add-on. The feature is available only on the Premium and Ultimate plans, and it must be activated in your organization's settings. If you're on a lower tier, you'll see the credit-check button greyed out or missing entirely, and the system will block any attempt to look up a customer's score.

1. Log in to Xero and navigate to Settings → Subscription.
2. Verify that "Credit Management" is listed under your current plan features.
3. If it isn't, click Upgrade and select a plan that includes the credit-check tool; follow the prompts to confirm the change.
4. Once upgraded, return to Settings → Credit Management and toggle the feature to Enabled.
5. Save the changes; Xero will now display the credit-check option when you open a customer record.

With the add-on active, you're ready to open a customer profile and run the lookup, confident that your plan supports the entire workflow.

First, log into Xero and navigate to the "Contacts" menu; this is where all your customers are stored. In the contacts list, locate the customer you want to run a credit score check on-use the search bar or filter options if you have many entries. Once you've opened the customer's details page, look for the "Credit score" tab or the "Run credit check" button, typically found in the right-hand panel or under the "More" dropdown. Clicking this option launches Xero's integrated credit check tool, which automatically pulls the latest data from the partnered credit bureaus. After the lookup completes, the screen will display the customer's score together with a risk band (low, medium, or high), allowing you to assess their financial reliability before extending credit.

If the tool does not appear, verify that your organisation has an active subscription to the credit checking service and that the customer record includes a valid identifier such as a tax ID or ABN; you may need to add or correct this information before the lookup can succeed.

Start by opening the Customers tab in Xero and locating the record you intend to evaluate. Use the search bar or filter options to narrow the list-type the business name, contact person, or even part of the email address to pull up the exact entry quickly. Once you've found the right line, click the customer's name to open its details page; this is the focal point for the credit score check.

On the customer's summary screen, look for the "Credit Score" widget (typically found near the top right). If you don't see it, ensure that the Credit Score add-on is enabled in your organization settings. With the widget visible, you can now run the lookup by selecting "Run Credit Score Check." The system will fetch the latest score and display a numeric value together with a risk band (e.g., Low, Medium, High), giving you immediate insight into the customer's credit profile.

First, open the Credit Score app from the Business menu or the Add-ons tile on your dashboard. Once the app loads, you'll see a search bar at the top; type the customer's name or email exactly as it appears in your contacts list and select the correct record from the dropdown. With the customer profile displayed, click the Run Credit Score button - Xero will now query the integrated credit bureau and return a numeric score together with a risk band (e.g., Low, Medium, High).

What to expect after you run the lookup

• Score - a number typically ranging from 0 to 100; higher values indicate stronger creditworthiness.
• Risk band - a colour-coded label (Green = Low risk, Amber = Medium risk, Red = High risk) that summarises the score's implication for your business.
• Date of refresh - the timestamp showing when the bureau last updated the customer's data, useful for tracking changes over time.
• Data sources - a brief list of bureaus or public registries that contributed to the score, helping you assess reliability.

If the lookup returns an error or "no data available," double-check that the customer's details are complete and correctly formatted, then try again. Persistent issues may indicate that the customer has insufficient credit history for a score to be generated.

When you run a credit score check in Xero, the result appears as a numeric score together with a colour-coded risk band. The score is a three-digit figure (typically ranging from 0 to 999) generated by the credit-checking service you've linked to Xero. The risk band translates that raw number into an easy-to-read category-commonly Low (green), Medium (amber) or High (red)-that indicates how likely the customer is to meet payment obligations based on their credit history.

Example scenarios

• A score of 820 lands the customer in the Low risk band, signalling strong creditworthiness and suggesting you can extend standard terms.
• A score of 560 places the customer in the Medium band; you might consider tightening payment terms or requesting a deposit.
• A score of 310 falls into the High band, warning that the customer has a history of defaults or late payments, and prompting you to evaluate additional safeguards before committing.

These illustrations help you quickly gauge where each customer sits on the risk spectrum, allowing you to tailor your invoicing and follow-up strategy accordingly.

A low score slots your customer into a higher-risk band, signalling that the probability of late payment or default is noticeably greater than for customers in the "good" band. In practice this often means you'll want to tighten payment terms-such as requiring upfront payment, shorter invoice cycles, or a deposit-before you extend credit. It also raises the likelihood that you'll need to monitor the account more closely, flagging any overdue invoices for follow-up sooner rather than later. While a bad score doesn't automatically disqualify a customer, it does suggest you should weigh the potential cash-flow impact against any strategic benefit of doing business with them.

Conversely, a customer with a strong score lands in a low-risk band, giving you confidence to offer standard net-30 or net-60 terms and to rely on routine collection processes. The risk of non-payment is statistically lower, so you can allocate fewer resources to monitoring that account and focus on growth-oriented activities instead. Even so, it's wise to keep an eye on any sudden changes in behavior, because a previously solid score can shift if the customer's financial situation deteriorates. In both cases, the credit score check provides the data point you need to tailor your terms and oversight proportionally to the risk indicated.

Once you've run a credit score check and have the customer's score and risk band in Xero, the next practical step is to translate that insight into a sensible credit limit. A well-calibrated limit protects your cash flow while still giving reliable customers the flexibility they need.

1. Match the risk band to a default ceiling - Xero lets you create "credit-limit rules" (e.g., Low risk = up to $10,000; Medium risk = up to $5,000; High risk = up to $2,000). Apply the rule that aligns with the customer's band.
2. Adjust for transaction history - If the customer has a strong payment record in Xero, consider nudging the limit upward by a modest percentage (5-10%). Conversely, recent late payments justify a slight reduction.
3. Set the limit in the customer record - Navigate to Contacts → Edit, locate the "Credit limit" field, and enter the figure you derived. Save the changes; Xero will now enforce this cap on invoices.
4. Communicate the limit - Send a brief note (template available in Xero) explaining the approved credit amount and any conditions for future revisions. Clear communication reduces surprise and encourages timely payment.
5. Monitor usage and revisit - Each month, review the customer's outstanding balance against the set limit. If they consistently stay well below it, schedule a follow-up credit score check and consider a controlled increase; if they approach or exceed the limit, trigger a manual review before extending more credit.

If a credit score check returns an error or shows no result for a customer, the first thing to do is verify the basics before assuming there's a deeper problem. Double-check that the customer's details-name, address, and tax identification-match exactly what the credit bureau expects; even a tiny typo can block the lookup. Also confirm that your Xero subscription includes the credit-checking add-on and that the service connection is still active.

• Re-enter or correct any mismatched fields and run the lookup again.
• Look at the audit log in Xero to see whether the request hit a timeout or was rejected by the provider; if it timed out, wait a few minutes and retry.
• If the error persists, contact the credit-checking vendor through the support link in Xero; provide the customer's identifier and the exact error message so they can investigate data availability.
• When you receive confirmation that the customer truly has no record (for example, a newly incorporated business), document this in the customer's notes and consider using alternative risk indicators such as trade references or bank statements.

After you've either obtained a valid score or clarified why one isn't available, you can proceed with your usual risk-band assessment. Keeping a clear log of each attempt helps you demonstrate due diligence and makes future reviews smoother should the same customer be evaluated again.

When you notice that a customer's address, company name, or contact information has been updated in Xero, the original credit score check may no longer reflect their current risk profile. Before you rely on that score, run a fresh credit score check so the risk band incorporates the latest data. Simply open the credit-checking add-on, locate the updated customer record, and click Lookup again; the system will overwrite the previous result with a new score and associated risk band.

If the initial check returned a "no-match" or a low-confidence score, a change in details can sometimes resolve the issue-especially when the previous entry contained a typo or an outdated identifier. After the retry, compare the new risk band to your internal thresholds; a shift from "high risk" to "moderate risk," for example, may allow you to proceed with the invoice or extend credit terms that you would have otherwise declined. Keep a brief note in the customer's Xero file indicating the date of the re-run and any differences observed, so your team has a clear audit trail of how the credit score check evolved with the updated information.