If you operate any kind of business, you know how important your business credit report is. This document verifies your creditworthiness, so if you are applying for a loan or a line of credit for your business, the lending institution can determine whether your company is capable of managing the credit; a bad credit report can result in unfavorable credit terms. Or, a vendor might check your credit report to determine whether you are a reliable company to do business with.
Your report will contain information such as what type of business you are in, how long your company has established credit, what your payment history is and whether you have been delinquent with payments, what kinds of credit you have or have applied for, and the like. Even if your company has struggled with credit in the past, it’s important to establish good credit so that you can conduct business normally; it’s important to take steps to bring your credit report back up to par.
If these reports are so critical to your business, who actually creates the reports? Credit reports are compiled by private, for-profit companies called credit bureaus. These companies gather information from various sources, compile reports, and then sell the reports to interested parties such as lending institutions, department stores, insurance companies, and even employers and landlords. Because the information is sensitive and those purchasing reports must rely absolutely on their accuracy, a credit bureau stands on reputation, which takes decades to develop. As a result, there are only a very few credit bureaus that are commonly referred to.
There are three major credit bureaus that compile records on both individuals and businesses: Equifax, Experian, and TransUnion. You must ensure that your company’s information with these bureaus is accurate and up-to-date. You should also ensure that your individual credit records with these firms are accurate. Your individual credit score will determine loan terms for any personal loans you may wish to take out, for instance; and if you are a principal in your company, a lending institution checking out your company might check your individual score as well.
Experian was founded in 1980 and has operations in thirty-six countries; the company is headquartered in Dublin and has operational headquarters in Nottingham, England, and Costa Mesa, California. The company covers North America, most European countries, several Latin American countries, China, India, Japan, Malaysia, Australia, and South Africa. Experian maintains credit information on companies and individuals and sells credit reports; it also collects information about motor vehicles, insurance, and “lifestyle data” obtained via surveys. The company offers various other services to business, such as marketing services. Its databases maintain information on 215 million people in the United States alone, as well as on 450 million motor vehicles.
Equifax is a U.S. company, founded in 1899 and headquartered in Atlanta. Equifax maintains credit information on more than 400 million credit holders worldwide. Like Experian, Equifax is primarily known for maintaining credit records on individuals, but in recent years has expanded into commercial credit reports; currently, the company maintains over 24 million business records. Among other services, Equifax allows you to monitor other companies’ business activities, setting up alerts for when a business partner or key customer faces bankruptcy action or other significant events.
TransUnion is the third credit bureau that maintains records on individuals; like Experian and Equifax, TransUnion also provides business and corporate credit histories, and assists small businesses with marketing services, risk management, and other services. Founded in 1968, the company is located in Chicago and operates 250 offices in the United States and in twenty-four countries overseas.
Experian, Equifax, and TransUnion are primarily important to individual credit holders, and business owners and principals should ensure that their personal credit histories with these bureaus are up-to-date and accurate. A company that focuses exclusively on business credit reports rather than individual reports, however, is Dun & Bradstreet. This long-standing company, which has been in existence in one form or another since 1841, maintains information on more than 190 million companies worldwide. Sales of business credit reports to interested parties form the major part of D&B’s revenue, but like other credit bureaus, D&B provides various business marketing, customer search, and other services.
There are several other credit bureaus that compile reports on companies in the United States and worldwide. Credit.net is a division of InfoUSA that generates reports on more than 14 million businesses. Nearly half of these are on companies with four employees or fewer. Small companies in particular should ensure that the information compiled by Credit.net is accurate. Accurint Business works together with the Better Business Bureau, and can provide current reports from that long-standing organization. And Client Checker targets small businesses and freelancers, helping small businesses match up with each other in mutually beneficial ways. Client Checker generates business credit reports when users report whether clients have paid on time, late, or not at all.
With so many millions of company records to maintain, it’s easy to see how credit bureaus can sometimes make errors in compiling business credit reports. It’s important for every business to keep track of the information maintained by these bureaus, to ensure accuracy.
