How to repair damaged business credit
Business Credit is credit that is obtained in a business name with
business credit the business build its own credit profile and credit score with
an established credit profile and scored the business will then qualify for
credit
this credit is the business name and based on the business’s ability to pay
not the business owners since the business qualifies for the credit in
some cases there is no personal credit check required from the business owner
once established the business can use its credit to qualify for revolving
store credit cards like Staples, Lowes, Sam’s Club, Costco, BP, Walmart even
MasterCard, VISA, and American Express the business can also qualify for credit
lines and loans
there are lot of benefits and building business credit for one a credit profile
can be built for a business that is completely separate from the business
owners a personal credit profile this gives business owners double the
borrowing power as they have both personal and business credit profiles
built
another business credit benefit is that business credit scores are based only on
whether the business pays its bills on time as a result a business owner can
obtain credit much faster using their business credit profile versus their
personal credit profile
approval limits are much higher on business accounts versus personal
accounts for SBA credit limits on business cards are usually 10 to 100
times higher than consumer credit
one reason most business left business credit is that most business
credit can be obtained without the owner taking on personal liability or a
personal guarantee this means in case of default the business owners personal
assets can't be pursued
there are three major companies that collect business information and publish
it
These are Dun and Bradstreet, also known D&B, Experian and Business Equifax.
D&B is by far the largest but the other two are catching up quickly
Dun and Bradstreet is the biggest in major business credit reporting agency
Dun and Bradstreet is a publicly traded company with headquarters in Short Hills
New Jersey and trades on the New York Stock Exchange
the main credit score used in the business world is known as a Paydex Score
provided by Dun and Bradstreet the Paydex score ranges from 0-100 with 100
being the best score a business can obtain
Experian was formerly a division of TRW an automotive electronics giant. TRW
was originally founded in 1901 as the Cleveland Cap Screw Company experienced
most recent score system is known as Intelliscore Plus which they boast of as
the next level in credit scoring
Equifax is called the small business financial exchange and is the most
important for cash lenders such as banks. Equifax is main business credit scoring
model is the credit risk score. Credit Score range from 1 to 100 with a lower
score indicating a higher risk of serious delinquency
now that you know a little about business credit and the business credit
reporting agencies now let’s talk about how you can actually fix damaged
business credit
many business owners think they have items reporting on their business credit
reports that really aren’t reporting but over 90% of trade vendors don’t report
to the business credit reporting agencies so chances are good that the
negative information you think is on your report might not even be there
remember most don’t report to the business credit reporting agencies so
one sign you will see when they do report is that they will send alerts
notifying you in many cases that they are about to report the credit
especially any type of negative credit their creditor will almost always notify
you in writing before they report the data to the business credit reporting
agencies they will even notify you multiple times in some cases that they
are about to report the item on your report
in many cases even the reporting agencies like Experian will notify you
before they report negative credit they might even send you three or more
notices clearly telling you that someone is about to report something negative on
your report and advising you to call the creditor and resolve the dispute
obtain business credit reports
to know what’s on your business credit you should obtain business credit
reports from the main business credit reporting agencies business credit
reports are offered by Experian, Dun and Bradstreet and Equifax you will first
want to get a copy of your business credit reports to see what is being
reported
you can enrol for the DNBi Self monitor form Dun and Bradstreet to
monitor your credit during the building process with D&B to get your reports
from D&B visit www.mycredit.dnb.com a subscription from D&B
self-monitoring will run you about $39.99 per month depending on the type
of report you want
to get your Experian report visit www.experian.com/small-business
Experian typically charged $36- $175
dollars for a full report
you can purchase a copy of your Equifax small business credit report here at www.equifax.com/small-business
dot equifax dot com forward slash small business
Equifax will charge $99 for a full report
You might have already heard of the FCRA the Fair Credit Reporting Act outlines
consumer rights to dispute inaccurate information on their credit reports but
it’s essential to know that this law does not apply to business credit repair
there are currently no laws which outline business owner’s rights regarding
credit disputing
the FCRA also requires credit issuers to notify you what bureaus they pulled
your credit data from to determine your denial for financing in the business
credit world this is not the case you rarely even know the source pulled your
business credit or which reporting agencies they pulled it with if you see
accounts or details you don’t recognize or you feel are inaccurate requested
debt validation for that account using a debt validation letter, a debt validation
is where you solicit the creditor for verification of the account details they
are reporting they will typically send you back details of your account that
they are reporting
the FCRA and the Fair Debt Collections Practices Act apply to consumer debts
not business debts so you can send a debt validation letter but the creditor
is not required by law to respond to your dispute
when sending a debt validation request your request must be sent to the
creditor in riding also ensure you dispute the debt with the credit
reporting agencies of the creditor doesn’t respond to your request if no
response is received within 30 days of mailing the letter directly to the
creditor, then you should then dispute the account with the business credit
reporting agencies
Disputing with the CRA
to disputed debt with the business credit reporting agencies first contact
customer service with any of the three reporting agencies for billing disputes
challenging payments and outdated public filings that appear on your report, when
you dispute an item the business reporting agencies will have vendors
re-verify payments and remove charges if the vendor cannot verify the
information
the business credit reporting agencies can also help to clear up issues that
have been settled or dismissed, yet still appear in your report you may be asked
to send in documentation to verify settlement or dismissal the business
credit reporting agency will then recheck the status of the public filing
if you do not have the documentation
I update from Dun& Bradstreet provides us based small business and
non-publicly traded Companies convenient access to D&B information on
their business registered users can view print and submit updates to their D&B
business information report
many business owners don’t know that credit monitoring services for Dun &
Bradstreet reports are actually provided by a private company known as D&B
credibility credit monitoring is not provided from D&B themselves instead
it’s offered by D&B credibility a completely separate entity do not get up
sold by D&B credibility
you do not need their business credit building package as it really won’t help
you in business credit building so don’t let them charge you hundreds of
thousands of dollars for their business credit builder package you don’t really
need
to get your Experian business credit report visit www.experian.com/small-business
or Google Experian update business credit
Equifax business also has an online system for credit disputing that they
provide through their online credit monitoring platform their member
Center under disputes
keep in mind the business credit reporting agencies may not be allowed to
release the name of the person making the negative reference on your report
remember you don’t have the same rights as you do with consumer credit reporting
as there is no Fair Credit Reporting Act however you can contact customer service
to discuss the item on your report as well as your options.
If your debt validation and investigation don’t net you the deletion
of the derogatory item, next you need to contact the creditor find out for them
what you must do to have the item removed from the business credit report
usually they will remove the account if you pay the outstanding debt
the main reason for the derogatory item to be on the report is usually because the
creditor feels there is an outstanding balance that you owe them so they will
typically remove the account if you pay the outstanding debt
if you reach an agreement for deletion get the agreement in writing and ensure
they provide you a time frame of when they will correct the damage on your
report
and if all else fails build your business credit
business credit scoring is based on how you pay your bills if you pay the
majority of reported accounts on time or early you will have a good score
most business owners have little to no credit reporting so even one negative
account can have a big impact on their business credit score.
It is essential that you continuously build your business credit profile just
as you do with your consumer credit one of the best ways to battle negative
information on your report is to offset it with lots of positive information so
continuously build your business credit profile just as you do with your
consumer credit
contact us today to learn more about how to repair damaged business credit.