Business Credit Report - Evaluate Your Organizational Credit Prospects

By Author: Michael Caine
Total Articles: 2
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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.