Credit management is the process of overseeing and controlling a company's credit policies and practices. It involves assessing the creditworthiness of customers, setting credit limits, and ensuring timely payments. Effective credit management helps businesses minimize the risk of bad debts and maintain healthy cash flow, which is essential for their growth and stability. A key aspect of credit management is the use of credit reports to evaluate potential customers. By analyzing these reports, companies can make informed decisions about extending credit. Additionally, implementing collection strategies can help recover overdue payments, ensuring that the business remains financially secure and can continue to operate smoothly.