8 Ways to Clean up Your Business Credit Report 5

A complete and accurate business credit report is like a gourmet meal to a loan underwriter.  Your business credit report is important for your company getting a business loan, because it tends to verify the information provided in your credit application and business plan.  Much like a personal credit report, unless it is managed, the business credit report is often inaccurate, incomplete, and presents your company in a poorer light than it should. If you want to maximize your chances of getting your business approved for a business loan or equipment lease, ensure that your business credit report is accurate and complete, and do it very early in the process.  In fact, why don’t you do it now?

Business credit reports are sold to the credit underwriters employed by lenders and equipment lessors.  Dun & Bradstreet is the largest supplier of business credit reports, but it is by no means the only one. The data that goes into the business credit report comes from a lot of different public and non-public sources:  lenders pool business credit information on a voluntary basis and public information is obtained and synthesized from sources like the Secretary of State or the Division of Corporations.  But don’t trust that the information is accurate. Take the responsibility to verify the report and then add as much information as possible.

The first step, of course, is to get a copy of your business credit report.  No need to pay for it; you can get one for free from any provider and you can modify the information (within limits) either online or over the phone.  We recommend doing it online.  Once you have the business credit report, verify it or correct it, following these tips:

    1. Make sure the business credit report accurately shows the business name, and any trade styles (DBA’s).
    2. Verify the physical business address, and include your website address.
    3. Look at the payments score in detail.  Is it accurate?  Does it accurately show payment promptness?  If not, you can challenge an entry that shows the payment was paid later than it actually was, but you’ll have to be able to prove it.
    4. Is ownership of the business accurately explained, and does the report properly show the business entity type (partnership, LLC, corporation), and time in business?
    5. The business credit report allows you to add the name of the officers of the company, the title and business function, and some work experience.
    6. It also provides for entry of the history of the company and any recent company events, such as a move to a new location, a change in ownership, etc.
    7. You can decide whether to add financial information about the company, but remember that you will be making sometimes sensitive information available to everyone if you do so.
    8. The business credit report will show liens, lawsuits, and loans.  Make sure this information is accurate.

Managing your business credit report is a good practice.  Schedule a follow-up in a year to revisit the report and check any changes or to add new information.

Loan form  image courtesy of Shutterstock

About the Author Mike Lockwood is President of TEQlease Capital, a nationwide provider of equipment lease financing solutions. He is also Managing Partner and founder of TEQlease Capital Partners, a Los Angeles, California-based equipment lease finance investment firm. Mike has over 25 years of structured finance, asset-based finance and leasing experience, including equipment lease portfolio acquisitions and equipment… Read more »

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  • http://www.shiftplanning.com Sara

    Nice tips Michael, surely business credit report should be well maintained before applying for loan else chances of rejection (can) rise up to 100%. A good report not only help in acquiring loan but keep you up to date/aware in case you are a partner with someone and he/she is at some other part of the world.

  • http://www.cebic.com Peter Zafian

    Hi! I have found that getting my business credit report is not easy and is not free. Whenever I make the inquiry to D&B, I get pitched to “cleanup” my credit report for a fee and that is about it. If anyone know the name of an other credit agency that will provide a report and/or how to get D&B to provide one at no or low cost, that would be of great benefit to all who are reading this.

    Thanks!

    Peter

    • http://www.Lease-Smart.com Gary Greene

      Peter:

      D&B would love to sell you services, but I’m not convinced they are worth what they charge. Nonetheless, you will want to know what is being reported and they do provide a resource for making corrections:
      https://iupdate.dnb.com/iUpdate/viewiUpdateHome.htm
      If you don’t know your D&B number or password, they’ll set you up with one and I’m pretty sure they won’t charge for it.
      Good luck to you!
      Gary at Lease $mart, AZ

  • http://www.wehaveaguy.com Bob Mac

    Great suggestion Josh. It should help you get business as well

  • Pingback: Four credit tips for young entrepreneurs

  • tj

    http://www.ukcreditinfo.co.uk provides really cheap company reports. I’ve used them twice so far.