What is a Business Credit Report :

A business credit report of a company encompasses that companys credit history. The report includes the companies borrowing and repaying records and other aspects such as

Fictitious business name, key facts, corporate registration, credit summary, banking, insurance, leasing payment summary, collections summary, judgments, tax liens bankruptcies, credit ranking score, collections detail, inquiries, UCC summary.

Why Have a Credit Report :

In corporate world today much of dealing is done on credit. However, it is not always safe to give credit to any person. The increasing numbers of frauds and cheating in the business world have magnified the significance of obtaining credit report. A business credit report helps a company to take informed financial as to with whom they should do business and at what price. A business credit report gives information on various attributes of a buyer company to the supplier company.

1. Business Background Information

With the business background information of the company asking credit the giving company can decide whether or not they should do business with the company.

2. Financial Information

A business report gives comprehensive financial information about the credit seeking company. This helps the supplier company to assess the business risk and to decide extending terms and credit levels.

3. Credit Risk Factors

The credit risk factor allows a company to review a current customers credit risk when considering an increase in his credit.

4. Banking, Trade and Collection History

This information allows a company to know what to expect form a certain customer based on his accounts pervious business practices.

5. Past liens, Judgments, Business Registrations and Bankruptcies

Information based on these enables a company to quickly determine whether they should enter in to trading terms with the customer and also make credit decisions. Depending on the report the company can also decide is it needs to for further investigation of the customer.

6. Uniform Commercial Code (UCC) filings

This information helps a company to determine its credit position in comparison to other credit positions that may be already be in place.

A Company should Monitor its Credit :

Every company is a customer to other company. As it looks for its customers credit some other company looks for their credit. As for the above-mentioned reason every company should monitor its credit. Along with them a company can also determine its business policies as through the companies own credit report it can determine

1. How much credit a supplier will extend to the company.

2. How much interest rates the company will have to pay.

3. How much the money lending institutions will loan the company.

4. What will be insurance premium the company will be required to pay.

5. And also the level of interest of potential investors.

Moreover, a company should monitor its credit report to obtain an increased access to capital, improve credit lines and get a financial, credit and reputation advantage over competitors.

A Company should Monitor other Companys Credit:

Monitoring partners and supplier companys credit greatly helps to get a advanced notification and information about the

1. The status and payment practices of a prospective customer.

2. Business condition and have the existing client.

3. An insight on relations of the supplier with others.

4. Notifications if there are any changes in the credit report of the suppliers or customers business credit report.

5. Gives awareness about what others in the industry are doing, especially the competitors.

6. Other finance and money related details.

Credit Score :

Generally when a credit report is generated the concerned agencies evaluate the companies credit in marks or scores called as credit scores. The appreciation of depreciation of the credit is reflected in form of rise and fall in the credit scores.

How get a credit report of a particular customer :

In many countries credit reports are provided by special credit reference agencies. These agencies offer these reports at a certain cost, which varies with the comprehensiveness of the report. In most companies a businessman or company is required to get memberships of the bureau to accesses their services because credit reports on other people or businesses are not available to just anyone.

These days such agencies also offer with free credit report services on a trial basis. The information obtained is not so comprehensive but the experience can be extremely valuable for some one who is new to using online credit reports.

Credit Reference Agency:

There are various credit reference agencies that provide online information on credit reports of various members. These companies help companys to better mange and grow its business credit. The help companies to track and monitor its keys suppliers credit report. The agencies provide with reports with different information at different costs. Normally the cost increases, as the report gets more comprehensive.

A Credit Report Minimizes Business Risk:

The biggest advantage a credit report offers is that it minimizes the business risk. Companies can receive updates about the credit status of key business relationships. Receiving these updates it not just easy but is also affordable and convenient as the agencies offer with a credit report monitoring services. To use these services a businessman doesnt requires a hardware or software. The data can be easily accessed through web browsers. The critical credit report is then delivered through email. The report monitoring service indicates to the company when a business may be headed for trouble. It informs

1. If a supplier is planning to go out of business.

2. Knowing when a key customer begins to get behind on payments.

3. To discover if the credit report contains errors that can negatively affect the companies cash flow position.

A business it may be big or small cannot afford to loose out its money in bad debts. For big business the losses are larger in volume and for small business they are smaller in amount. Well but both are equally affected by any such losses. Thus in such conditions having a credit report of the customer is extremely beneficial.