An important method for credit risk management, is a detailed and superior business credit report provide you with the premium and deep understanding and depiction of the and in-depth analysis of a business's credit information, whether it's a potential customer, prospect or vendor. The information in these reports is continually reorganized and always easy to get to. A
business credit report helps identify the
credit worthiness of an organization. It functions as the ultimate reference for suppliers to evaluate the risk that providing services to other organizations may entail. It also serves as a reference to the organizations to evaluate their own credit prospects.
An exhaustive business credit report will have the following features embedded in the report:
Credit ranking score and credit summary
Key facts about the business
Corporate registration and contact information
Key personnel
Detailed financial payment trends
Predicted payment behavior
In-depth credit history
Uniform Commercial Code filing information
Banking, insurance and leasing information
Standard & Poor's financial information
Bankruptcy filings
Judgment filings against the business
Tax lien filings levied against the business
Credit inquiries made in the last nine months
For a better evaluation of an organization through its credit report, it is essential that the business credit report contain the following elements:
Rating: Many
credit reports contain the rating section that states, in numbers or words, the creditworthiness of the organization. These ratings are evaluated by analyzing various parameters, such as
payment
Performance: Payment history: This section contains information about how the company pays its bills. As an evaluator, one should check for timely payments and payment trend. For example, if the company used to pay just the minimum balance each month but has started to pay in full, it shows better productivity and therefore better creditworthiness.
Company information and background: This section contains all the information about a company, such as the number of employees, phone numbers, address,
business type, industry type and sales figures. If the information is not consistent, one can contact the organization for explanations or simply identify the probability of fraud.
Legal issues: This section contains information about
bankruptcy, court judgments, lien and other legal information.
Collection proceedings: This section highlights whether there is a pattern of missed payments.
However, one should note that accounts in collection agencies are sometimes a result of disputes as well.
Company age: Older companies are better at managing funds than younger companies. Although young companies may also show the same competency, older companies enjoy a better rating due to their duration of existence.
UCC filings: This section (Uniform
Commercial Code) contains information about the liens and leases of a company.
