The Credit Reference Conundrum: Why We Keep Asking for Them (Even Though We Know Better)

We all do it.

We ask for three trade references, and the customer sends us three vendors who think they walk on water.

They pay on time, they’re polite, they always respond to emails (allegedly). The references are glowing…maybe even suspiciously so.

And yet, we call them anyway. We jot down “pays within terms” and move on, feeling like we’ve done our due diligence.

Here’s the truth: we all know these references are basically marketing copy dressed up as credit verification. But we keep doing it anyway.

Why Do We Trust These References?

Because it feels official.

Because it’s “what we’ve always done.”

Because it looks like risk management

on paper.

But let’s be honest, trade references are about as objective as your mom’s opinion of your cooking.

Customers handpick their happiest vendors. The ones they’ve never slow-paid, argued with, or ignored. You’re not getting the truth; you’re getting a curated highlight reel.

I once called a reference who said, “Oh, they usually pay around 90 days, but they always call to let us know.”

That’s like saying, “He’s always late, but at least he texts.”

It’s not bad information. It’s just not useful for predicting what’s going to happen to you.

Why Do We Keep Doing It?

Habit.

Compliance.

Comfort.

We like the illusion of verification. “They gave us references, we called them, we’re covered.” It feels like progress.

But calling references is only worthwhile if you treat it like an investigation, not a checkbox.

Ask questions that make people think:

• “How long have you worked with them?”

• “Have you ever had to hold an order?”

• “How quickly do they pay after you follow up?”

• “Would you extend them more credit today?”

It’s not about the answers; it’s about the tone.

If the reference hesitates before answering, that pause is your real report.

What To Do Instead?

So what’s the solution?

You can’t eliminate references entirely, but you can stop letting them lull you into a false sense of security.

Start layering your information:

• Combine references with hard data. Credit bureaus, payment trend reports, public filings, all of it matters more than three cherry-picked names.

• Use modern tools. SaaS credit platforms can automate reference collection and verify that emails are real (no “reference@gmail.com”).

• Look at behavior. How did the customer handle your process? Were they quick, transparent, and cooperative, or evasive, rushed, and demanding? That tells you more than a reference ever will.

• Document everything. If a reference says “great payer,” note it. But also note that you called, what was said, and how confident they sounded saying it.

The Real Lesson

Credit references aren’t useless. They’re just incomplete.

They give you a glimpse, not a guarantee.

They confirm what the customer wants you to know, not necessarily what you need to know.

The best credit professionals don’t just trust the names on the page. They read between the lines, listen for what’s not said, and trust their instincts more than a scripted answer.

When it comes to credit risk, the real conundrum isn’t that references are unreliable…it’s that we keep pretending they aren’t.