What Makes Experian Business Credit Reports So Valuable

Ann Marie Smith

Jan 18, 2021

If you are extending credit to customers, you need to ensure they will be able to pay their bills promptly. If you are working with a vendor or supplier, you need assurance that they are financially healthy so you know they can deliver on their commitments. If you are planning to apply for a business loan, you need to be sure your business credit is in the best shape possible.

Knowing how lenders and other businesses view the financial health of your business, and the stability of those you do business with helps you better manage your business and makes it possible for you to negotiate better terms or rates. An Experian business credit report provides background information on a business as well as credit scores, assessment of financial stability and a credit summary.

Experian Business Credit Score

Experian business credit reports use four key factors to evaluate credit risk:

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

The Intelliscore ranges from 1 to 100 and high numbers equate to less risk. Tradelines, collections reports, and public filings are also used to predict the likelihood that a business will have a serious credit delinquency problem within the next year.

Experian Financial Stability Risk

Experian business credit reports also produce a Financial Stability risk rating. This is scored on a scale of 1 to 100 and lower ratings indicate more risk. Four factors that contribute to the financial stability score are:

  • Number of active commercial accounts
  • Risks associated with the business type
  • Risks associated with the industry
  • Business size

This part of Experian’s business credit reports evaluates the likelihood that a company will default on payments or declare bankruptcy during the next year.

Experian Credit Summary

The credit summary section shows benchmarks for the industry on Days Beyond Terms (DBT) and for the business being searched. It also shows:

  • Payment trends
  • High and low balances over the past six months
  • Credit extended

You can view trends across tradelines, including recent activity in 0-30, 31-60, 61-90, and >90 days DBT and see collections, commercial banking, insurance, and leasing information as well as judgments and liens.

How Experian Business Credit Reports Help You Manage Your Business

An Experian business credit report gives you a snapshot of the financial health of any business, including yours. It is important to manage your business credit report because when you have good business credit, you can:

  • Save money by negotiating good loan and credit line terms
  • Obtain business credit without needing a personal guarantee
  • Retain more profits by paying less interest on loans

View samples of an Experian business credit report and buy online.

Spotting Fraud

US businesses reported $42 billion in fraud during the past two years and an estimated 47% of all companies have experienced fraud in the past two years. Monitoring your business credit reports can help you spot signs of fraud on your business report. In addition, pulling and reviewing a business credit report on all customer, partners and supplier will allow you to validate the business you are dealing with is a viable business and not a fraudulent entity.

Maintain Solid Relationships with Partners and Vendors

Corporate debt has risen to record levels. US companies now owe an astounding $10.5 trillion to creditors. While debt is not necessarily bad, it can be if it is not used properly. The fact that many businesses have leveraged themselves during a time of economic uncertainty adds another layer of risk.

If you have done business with a customer for a long time and that they have paid their bills on time, there is no guarantee they will in the future. When you see payments start to slow or credit amounts start to add up, it is a good idea to order a credit report to review their financial history and payment trends to other businesses.

The same is true for vendors. Your cash flow depends on your ability to get products and services from your vendors and suppliers on time. If they are having cash flow problems, they may not be able to get the raw materials they need. This can disrupt your supply chain and hurt your ability to generate revenue. This is why it is a good idea to check the financial health of your suppliers before you issue large purchase orders,

How to Buy Experian Business Credit Reports

accredit allows you to buy Experian business credit reports without requiring you to sign up for a long-term subscription. Just enter the information about the business you are checking on, click, and instantly download the business credit report.

Experian is one of the three major credit reporting agencies that offer business credit reports. If you are not sure whether Experian is the best business credit report for your needs, you can compare the differences between Experian, Equifax, and Dun & Bradstreet and purchase the one you need.