My Business Credit Wishlist for 2010
As we head into the New Year, I’ve compiled my business credit wish list. These are things I’d like to see changed when it comes to business credit:
1. Every business owner be provided with one free copy of their commercial credit report from every nationwide reporting agency. This would be the equivalent of AnnualCreditReport.com, but for businesses. Not only would this allow business owners to challenge mistakes, but it would also help them better understand which of their lenders and vendors report, and allow them to better understand how business credit works.
2. That business credit card issuers would not report business credit cards on owner’s personal credit reports unless they default and a personal guarantee kicks in. In a previous post I described how Capital One suddenly changed their reporting policy for their small business credit card accounts. That blog post has generated more comments than anything else I have written on the topic of business credit in 2009. Just one example of an email I received:
“I am a small business owner, which before the recession employed 25 people, now we are down to 8. I have a few Capital One cards for this business and other small businesses I have started. I carry a balance on all 3 of them. Since Capital One changed the reporting policy to my personal credit account, my (FICO) score went from 720 to 660 almost overnight. I tried to keep the business debt off my personal credit as much as I could and until now, didn’t have any business debt on my personal account. This is destroying my personal finances. My insurance renewals just went up and other credit card issuers are lowering my credit lines. This is Crazy!!!”
3. Commercial Credit Reporting Agencies would publish lists of firms that report client’s payment histories. This would allow small business owners who want to establish a strong business credit history the opportunity to do business with companies that report. Right now it is difficult to know who reports, and to which agencies they report.
4. The small business lending freeze unthaws, giving firms who have the ability to weather the current economic storm a fighting chance at surviving – and thriving. I don’t think there’s a need to elaborate here. You know what I mean.
5. Business credit card rates come down for entrepreneurs who pay their bills on time. While I am not certain rate caps are the answer, interest rates like Advanta’s 29 – 37% retroactive rate hike for cardholders who were never delinquent is simply abusive. Business owners who are responsible and pay their bills should not have to pick up the tab for credit card executive’s bad decisions.
What do you think? What’s on your 2010 business credit wish list?
Gerri Detweiler’s mission is to provide reliable, unbiased answers to your credit questions. She is the co-author of Business Credit Success: Get on the Financing Fast Track and serves as Personal Finance Advisor for Credit.com.