What You Can Learn About Suppliers and Customers with Company Credit Reports

Ann Marie Smith

Apr 19, 2021

When you take on new suppliers or customers, you need credible information about their financial situation to avoid putting your business at risk. Pulling a company credit report can help you uncover the potential warning signs of a deteriorating financial situation.

Company credit reporting helps you avoid doing business with customers that fall into high-risk categories. Pulling a company’s credit report ensures you will not be the last to know when a customer or supplier is dealing with financial hardships.

Running a successful business requires close attention to cash flow. When customers have a deteriorating cash position, they are more likely to make late payments or go into a delinquent status, which negatively impacts your cash flow. When suppliers have financial hardships, they may not be able to acquire the raw materials or products they need to fulfill your orders.

A company credit report can provide you with the information you need to make smart financial decisions about your business and take steps to protect your cash flow.

What You Can Learn from a Company’s Credit Report

A company credit report from any of the three major company credit reporting agencies provides you with an overview of the business and a basic company profile. Depending on which business credit report you choose, you will also get information about business viability and repayment risks.

The Experian Score Summary

The Experian Score Summary provides a financial stability risk score, assesses repayment risk, and suggests credit limits based on current financial performance. Experian also provides an Intelliscore, which is a business ranking that is similar to a FICO score for evaluating personal credit.

Experian uses four key factors to evaluate your risk with customers or suppliers:

  • Commercial accounts with terms of more than 30 days
  • Commercial accounts that are not current
  • Commercial accounts with high credit utilization
  • Length of time in Experian’s database

The Equifax Score Summary

A company credit report from Equifax provides its version of a credit score, repayment risk, financial stability risk score, and a credit limit recommendation. It also provides summary-level details of financial and non-financial tradelines.

Equifax builds its credit risk scores using financial services and trade payment data. The Payment Index is a dollar-weighted indicator that assesses a company’s past and current payment performance, which helps predict the likelihood that a business will experience severe delinquencies or file for bankruptcy during the next year.

Both Equifax and Experian also provide payment and legal filings summaries to help you evaluate customers and suppliers. Both credit reporting companies provide detailed financial information including:

  • Days beyond terms (DBT)
  • Creditor balances
  • Bankruptcy
  • Liens
  • Judgments and UCC filings

The Dun & Bradstreet Score Summary

A Dun & Bradstreet (D&B) Score Summary provides a PAYDEX® Score. The PAYDEX® Score indicates the risk of slow payment on invoices and estimates business viability compared to other businesses. D&B also includes a Total Loss Predictor that is used to project the likelihood of a customer paying on time in the future.

Vendors and suppliers submit payment information to D&B, which is used to determine how promptly customers pay their bills — a leading indicator of how they will perform going forward. Dun & Bradstreet uses these tradeline references to assess viability as part of its PAYDEX® Score but does not report them separately.

Which Company Credit Report Is Right for You?

Experian, Equifax, and Dun & Bradstreet provide slightly different information using different sources. You can find information about tradelines and how current accounts are for suppliers and customers in the Experian Premier Profile company credit report and the Equifax Score Summary report.

If you are unsure which is the right company credit report for your needs, get more details on what is included in each and view sample reports at accredit. You can also download our free executive report, How to Select the Right Business Credit Report, for a more in-depth comparison.

With accredit, you are not locked into a subscription service. You can pull company credit reports on customers or suppliers as you need as and when you want as they are available on-demand 24/7. When you review a company’s credit report, you will have confidence that your customers will pay as agreed and that your suppliers can deliver on time.

Pull Company Credit Reports Instantly

With 30 years of experience, accredit equips businesses with the business intelligence they need to understand customer and supplier risk. With accredit, you can instantly download a company credit report from Equifax, Experian, and Dun & Bradstreet.

Visit accredit today to search and select business credit reports.