Consumer credit reports are developed using information from a variety of sources, most of which are reported by third-parties. But some companies generate business credit profiles based on information that is both self-reported and third-party reported. That means that more so than with your consumer credit, you can proactively manage your business credit profile by ensuring it is always complete, accurate, and timely.
The pace of business change is rapid. In the next 60 minutes:
- 183 business phone numbers will change
- 43 business addresses will change
- 7 businesses will file for bankruptcy
Public companies typically have an easy time communicating changes to the business community; most have teams dedicated to that purpose and these businesses are obligated to report changes to the public. But if you don’t have a team to take care of that, the onus is on the business owner to ensure some of those changes (e.g., new leadership) are self-reported in a timely manner. It’s essential that your business credit profile changes with your business; your business credibility can be enhanced when the information on file is correct and up-to-date.
Just as important as accuracy and timeliness is the completeness of your profile. If your business credit profile lacks basic information — information potential creditors would expect to find — they might view your company as a risky proposition. Incomplete information can be as harmful as poor credit activity because in risk analysis, unknown quantities are considered risky. For these reasons, it is essential that you establish your business credit profile, populate it with as much information about your business as you can, and ensure that you update and review it regularly.
Managing your business credit profile is an ongoing responsibility, and can be accomplished by:
- Monitoring the information that is contained in your credit report for changes,
- Updating information contained in your business credit profile, and
- Getting your key vendors to report your payment history with them
By managing your business credit profile, you will not only avoid mistakes and omissions, but you can be confident that your business is always being evaluated in the best possible light.