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Business Online Credit Report Speeds Up The Financing Process |
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Until recently a
business online credit report was not readily available to most small companies and individuals. As a result very few businesses used a business online credit report or indeed any form of credit checking on their new or existing customers. However, things are now changing. A business online credit report can now be purchased instantly online and as a result the business community is now slowly waking up to the benefits of performing cost effective checks on customers and suppliers. Every day, thousands of small businesses, firms, and corporations request business online credit report. They do it for re-consolidation, home or office remodeling, security, new office equipment and furnishings. More important, a free business credit check can inform you about an inaccuracy that can deprive you on a business and personal level. In recent years, many landlords have begun using business online credit reports as a good source of objective information to help them identify potential risks in a pool of rental applicants. Because these credit reports are now available online through specialized tenant screening agencies, they are fast and easy to obtain, allowing landlords to make sound tenant selection decisions without spending a lot of time ordering and interpreting credit reports themselves. Your online credit report is made of three key ingredients: overall credit rating, Paydex score, and percentage of payments within terms. Overall business credit rating is the first item a lending company looks at; Dun and Bradstreet ratings, in particular. If D&B have current financials on a company, they have a rating anywhere from 5A to HH. The 5A to HH ratings reflect a firm's size based on net worth or equity. If a firm has supplied financials that show their company has a negative net worth, then their company will not be rated. The second most scrutinized score on business online credit report is a firm's Paydex score. It is a unique, dollar-weighted indicator providing an instant overview of how a firm has paid its bills in the past, and how the firm is likely to pay its bills in the future. It is essential that this score is good, to be approved for credit terms or financing. Percentage of payments within terms is the third item of business on business online credit report to be judged by a lending institution. It will relate directly to the Paydex score, and when the weight or size of the payment is not considered. This figure is generally found on business credit reports in the paragraph that describes what the Paydex score is and what it represents. Most screening agencies that offer business online credit report get their information from credit reporting agencies (CRAs). CRAs gather all of the relevant information contained in an individual's financial history and then compile it into an online credit report. These online credit reports are then sold to individuals wishing to know the credit scores, financial institutions, and other businesses who have a legal interest in the information they contain. An individual's credit score will fall somewhere between 300 and 900; the lower the credit score, the higher a financial risk the person is thought to pose. This credit score is also called the FICO score because Fair, Isaac and Company developed the formula it is calculated with. To calculate an individual's FICO score, a CRA evaluates their payment histories, the amount of money they owe and to whom, the length of their credit history, and the types of credit they have. Using the Fair and Isaac formula, this information is compared with trends that have appeared in the millions of past online credit reports that have been produced, and a credit score is assigned. When you sign up with a screening agency to receive business, online credit report they will create a password account for you. With this account you will be able to order online credit reports 24 hours a day and have results within seconds. Because of the large number of these screening agencies available, you should be able to find one with competitive pricing and the options you want to help make your job easier and more efficient. |
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