In a press release today Dun and Bradstreet announced that it joined forces with Transunion to blend consumer and business credit information in order to improve the overall risk assessment of small and micro businesses.
This is a major announcement that impacts both lenders and small businesses on a national scale.
Over the past couple of years the economic downturn has given the word “risk assessment” a whole new meaning. It was only a matter of time when a new dimension of analytics would begin to take shape and this is just the beginning.
As you know there are millions of pieces of data that are collected on consumers from consumer reporting agencies like Transunion (500 million to be exact) and millions of business records are compiled from business credit bureaus like Dun and Bradstreet (150 million to be exact).
With all this information is it any wonder that one day we would see the merging of credit data from two leading companies.
According to Byron Vielehr, president of D&B Global Risk and Analytics, “Small businesses’ credit-worthiness can be correlated to consumer credit history.”
I would have to disagree simply from the fact that there are certainly other events or circumstances that may cause a business owner to incur personal credit challenges while the financial responsibilities of the business remain intact.
If a business owner truly separates his personal credit from his business credit then there should not be a correlation between the two but unfortunately the majority of owners continue to co mingle personal and business expenses to this day.
In August of this year D&B plans to launch its new Commercial Credit Score 8.0 which incorporates consumer credit data from Transunion with D&B’s business records giving its customers a newly enhanced scoring system.
It will be interesting to see the impact this will have on small businesses and its ability to obtain financing with little to no trade credit with D&B.
If merging consumer credit data from Transunion has a positive impact on its commercial credit score it may just be the answer some small businesses have been waiting for.
However, what type of impact will this have on the businesses with strong D&B ratings but the owner has little to no consumer credit? What about the business with a strong paydex score with financial stability but the owner has a dismal consumer credit file with Transunion?
How do you think this will impact your business?
I’ll keep you posted on new developments as they become available.
Read the full press release ‘D&B Announces Services for Customers to Better Predict Small Business Credit Risk’
Marco is founder of the Business Credit Insiders Circle, a step-by-step-corporate credit builder program for small business owners. You may contact Marco directly at: email@example.com