Businesses do not just evaluate themselves but also their potential clients with the help of business credit reports. These reports show current financial positions and also help one understand whether doing business with a company will be healthy in the long run or not, especially with respect to the ability to pay on time. Although businesses deal with a certain amount of risk at all times, it is also important to minimize the same wherever possible.
What do Business Credit Reports Show?
Any business that looks at the Equifax business credit report online of its client will get to know about the following:
Risk Assessment – Client credit reports indicate current and future risks and also evaluate business sustainability payment behavior.
Big Picture – Use a credit report to receive a 360-degree overview of the business in question. It puts together various business facts such as trade payment data, repayment risks, legal filings summaries, and more information in the form of a report.
Call for Investigation – In case a client company’s financial data is not found in the credit database, businesses trying to work with them may request for investigations.
Top Credit Bureaus for Businesses
All credit scores, irrespective of whether for business or personal use, are obtained from credit bureaus. There are a lot of bureaus in the market, but three of these are considered the most accurate:
- Experian
- D&B (Dun and Bradstreet)
- Equifax
Both loan interest rates and repayment terms on the basis of scores collected from these bureaus. Third party websites which get these scores from the bureaus provide comprehensive credit score summaries. B2B customers are allowed to look at sample reports here.
Work with the best Teams
Reputed third party websites for business credit would have large teams of highly experienced risk management experts. These experts are instrumental in assisting businesses in evaluating how well a potential client can pay bills. They will be work towards the following:
- Improvement of Cash Flow
- Minimizing Financial Risk
- Success of the Business
Credit and Small Businesses
As soon as a business gets established as an LLC (Limited Liability Company) or as a Corporation, it will also be able to create its own business credit file. The three major credit bureaus mentioned above manage business credit reports by using their commercial credit databases. When small businesses first start out, businessmen tap into their personal credit for support or for assistance during downturns. Personal and business credit scores gradually become separate for them.
To evaluate other avenues of business financing, small business look at lenders with credit scores from 0-300. This is different from personal credit scores, where healthy ones should be from 300-900. To get longer terms from suppliers and vendors as well as to easily qualify for corporate and government contracts, favorable business credit scores are helpful.
Day-to-Day Operation is a Big Task
For a small business, daily operation is a massive task in itself. Of course, owners have to also keep thinking of ways to keep expanding their businesses as well. With the other activities in place, it sometimes becomes very difficult to think seriously about risk management. Fortunately, Equifax has a history of helping companies of different sizes in managing their operational and financial risks. At the same time, it and other bureaus will help business owners know what other service providers, potential partners, and lenders think about them. Therefore, steps to improve credit and get the require financing can be taken accordingly.
Ways to recognize Credit Fraud
Although there may be a number of companies which provide credit in the market, it is important to understand the fraudsters and stay away from them. Here are some of the giveaway signs:
Robotic Calls from Credit Card Companies – All of these, irrespective of where there are coming from, are frauds. The calls are meant to trick people into giving out their personal information over the phone. Old people in the business must also be told to stay wary.
Fake Emails – Individuals should learn to identify the phishing emails, whether in their own accounts or those of their companies. Typos, erroneous hyperlinks, and bad grammar are the telltale signs which will easily be identifiable after a while. All elderly people in the circles should also be coached on the same.
Check Monthly Credit Card Statements – A lot of people blindly pay their credit card bills without going through their statements carefully, and this holds true of business cards as well. All purchases which cannot be understood should always be flagged. Disputing sketchy charges has become easy with banks these days.
Receive Copies of Credit History – Businesses can now obtain their credit histories from the bureaus every year. Consistent monitoring will help catch errors and frauds in a timely manner, and that’s exactly why credit reporting agencies are of most help.
