In a perfect world, everything just works. You sell your products or services at a profit, your customers are satisfied, and bills are paid promptly. Unfortunately, that is not always the way things work out.
Whenever you extend credit, you are taking a risk. Pulling a corporate credit report can help you mitigate that risk by providing an independent assessment of a customer’s financial health and stability.
Pulling a company credit report is especially important when you are dealing with large corporations or their subsidiaries. You may assume that large corporations are more financially stable, but research shows that is not always the case. An examination of large companies that existed before 1980 revealed that 80% no longer exist. Even before the pandemic, the study published in the Harvard Business Review reported that longevity is decreasing even further.
During the pandemic in 2020, many companies that had been deemed financially sound found themselves overextended and unable to meet their obligations.
One of the best ways to ensure you receive timely payments and protect your business is to do a quick analysis of the financial health of your customers using a corporate credit report.
How Corporate Credit Reports Help
Doing business with a large, established company, a business with multiple locations, or a company tied to a larger corporate entity may provide a stable foundation. If these corporations are financially sound, your business can prosper from the relationship.
If corporations are showing signs of financial concerns, however, you need to know so you can take the appropriate steps to protect your business.
A corporate credit report can help you assess the financial health of your customers so you can make smarter business decisions. Small and medium-sized businesses, in particular, can find themselves at substantial risk if their corporate customers are unable to pay their bills promptly.
Corporate accounts often require more favorable credit terms or larger credit limits. Granting credit to corporations can put your cash flow at risk if you’re not making good business decisions.
Which Corporate Credit Report Is Right for Me?
Corporate credit reporting is available from three major business credit reporting agencies: Equifax, Experian, and Dun & Bradstreet. While each of these companies uses different data sets to assess corporations, all of them collect information from creditors, public records, and other resources, such as tradelines, to produce an overall risk assessment.
Dun & Bradstreet Corporate Credit Reports
Dun & Bradstreet is the oldest credit reporting company, founded in 1841. The D&B Summary reports will provide a credit summary, a risk score, and a financial stress score. They also provide benchmarks for corporate credit reporting against other companies within the industry.
Dun & Bradstreet summarizes its reporting with its PAYDEX Score. The PAYDEX Score ranks the creditworthiness of a business and predicts how quickly they will pay their bills.
When running corporate credit reports, D&B can be helpful in examining a customer’s family tree to let you know if a company is its own entity or part of a larger conglomerate. Knowing the company connections can help you better assess risk.
Equifax Corporate Credit Reports
Equifax has also been in business for more than a century. The Equifax Score Summary also produces a credit score and forecast repayment risk. Equifax provides a financial stability risk score and credit limit recommendation.
Equifax also flags if corporations are paying their bills beyond established payment terms and whether there are liens, bankruptcies, or judgments. One important feature of the Equifax reports is that it provides summary details for a company’s tradelines.
Experian Corporate Credit Reports
While Experian is the newest corporate credit reporting agency — founded in 1996 — the Experian Score summarizes financial stability, assesses the risk of repayment, and an overall rating that Experian calls Intelliscore.
Experian can also report on past due accounts, derogatory legal filing or fraud alerts, and provide a recommendation on credit limits.
If you are unsure which corporate credit report is right for your business, you can see more details on what each corporate credit reporting agency provides and view samples.
Buy Corporate Credit Reports Instantly
You can search and select the corporate credit report that is right for you and download it instantly at accredit. Corporate credit reports are available 24/7.
At accredit, you do not need to sign up for a subscription service. Whether you need to do a one-time search on a new customer, pull multiple reports on customers and suppliers, or want to check your credit score for your business, you pay for only what you need.
With the corporate credit reports, you can quickly get the information you need so that you can confidently grow your business without putting it at risk.