Commercial Credit score is really important for the whole
business process. Using this tool well will make your business move smoothly in
expanding business scope. Just like Dun & Bradstreet, Experian, &
Equifax, eGTCP has its unique advantages in Chinese supplier’s credit status monitoring.
Understanding
Commercial Credit Scores & Reports
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| image credit: internet |
The concept of creditworthiness dates back to the early 1800s,
ever since there have been lenders there has been a need to assess a borrower’s
risk level. It was not until the 1970’s, when the Fair Credit Reporting
Act (FCRA) was passed, that borrowers were protected from lender bias
having an impact on their likelihood of loan approval and rates. Consumers are
offered a variety of protections and security under the FCRA of 1970 and its
amendments in the 1990’s and 2003, but businesses and corporations were left
out of the FCRA. To this day, businesses are not protected under the FCRA and
business credit is highly unregulated. Therefore, business owners can
experience limited success and stunted growth if business credit profiles,
scores, and indexes go unmanaged.
The
Bureaus – Dun & Bradstreet, Experian, & Equifax
Dun & Bradstreet, Experian, and Equifax have
roots that date back to before the turn of the century. All three maintain a
global database, separate from one another, that contains information and data
on millions of businesses and consumers.
According to D&B: Their commercial credit scores “…predict
the likelihood of a business paying its bills in a severely delinquent manner
(91 days or more past terms), obtaining legal relief from its creditors or
ceasing operations without paying all creditors in full over the next 12
months. D&B defines severe delinquency as a business with at least 10% of
its payments 91 days or more past due, based on the information in D&B’s
commercial database. The score ranges from 101 to 670, where 101 represents the
highest probability and 670 represents the lowest possibility of delinquency.“
Risk Class – “Separates businesses into five distinct risk
groups where 1 represents businesses that have the lowest probability of severe
delinquency, and 5 represents businesses with the highest probability. The
credit score class allows you to quickly segment new and existing accounts
according to risk to determine appropriate marketing or credit policies.”
Percentile Norms – “Represent the average score and
percentile for all scorable companies with similar demographics, and they can
be used to benchmark where the company stands relative to the norm for its peer
group.”
Distribution of Commercial Credit Score Risk Class
“The table below illustrates the distribution of the Commercial Credit Score Class in the Dun & Bradstreet Business Universe. In addition, this table displays their associated Percentile Ranking and Score, along with the Delinquency Rate.”
What
to Look for In a Business Credit Repair / Building Company?
Businesses need to be more proactive – just because credit is
not affecting you today does not mean it should be pushed off until tomorrow.
Most businesses have a plan for eventual expansion and will need a strong and
established business credit profile on their side in order to gain access to
loans, leases, lines of credit, new partnerships/accounts, and government bids.
Pushing your business credit down on your ‘to-do list’ is only going to further
frustration when it comes time for growth.
Each business credit reports includes scores and indexes that
are used to assess and predict a business financial standing and payment
habits.
eGTCP has years of
experience in fixing, correcting, and monitoring business credit profiles from
all three of the major credit bureaus.
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