A friend of ours is planning to put in a new kitchen.  Like all domestic projects, he and his wife have gone out to a number of local kitchen companies, had them visit the premises, prepare drawings and obtain quotes.  Whichever way they cut it, they look like they are going to end up spending something in the region of £25,000 on their new kitchen and all the companies who have put forward proposals for this work have asked for a deposit in advance of the work commencing ranging from 25 to 50%.

I happened to mention to them that someone else I know was recently carrying out some work on their house and paid a deposit only for the company to go into liquidation and for the deposit to be lost.

It really surprises me, in the current economic climate, with people being prepared to spend sizeable sums on their homes that they don’t spend just a few extra pounds on obtaining a credit report on the companies with whom they might be instructing.

A credit report can show some warning signs that can make you think twice about who you deal with and should be a factor in making the final decision.  The report can provide you with a credit rating on the company together with an indication of their financial stability.  Sure, it is no guarantee of solvency, but it can give some clues and can lead you to asking further questions.

My advice is whenever you are thinking of spending some serious money even in a domestic situation; obtain a credit report on the company before you part with any money.