Check the Credit of Potential Clients
There are service businesses that must extend credit to clients because they do not collect payment up front and must invoice to collect payment after services rendered. These type of companies should always check the credit reports of new clients before doing business with them. You can make an informed decision and have the option to refuse customers who have low scores or warning signs on their credit reports.
Do not be the type of business that preys on people who cannot usually get credit elsewhere. These types of situations will only hurt you in the end. You will devote time and energy to debt collection. The time you spend getting people to pay for the credit issued to them translates into lost income and lower profit margins. This time could be better used to acquire higher quality clients.