skip to Main Content

Does Your Business Credit Report Have Errors?

Your business has a credit report that is totally separate from your personal credit report! In todays economy when you apply for a line of credit with a bank, vendor or leasing company; the  company will check your personal and business credit. A low business credit score can result in rejection of your financing application, force you to pay suppliers cash on delivery for inventory, pay higher insurance rates, etc. 

If there are errors on your personal credit report you can use the Fair Credit Reporting Act to dispute them but your business is not protected under this law. A Wall Street Journal survey showed that 25 percent of small business owners found errors that put them in a riskier category. 
And these were just the substantial errors. Who knows how many discrepancies went overlooked?
Unfortunately, these mistakes can cause your credit application to be denied or even if it is approved if can negatively affect the terms you receive..
Here are three common errors and how you can fix them:
1. No FCRA protection for business credit  
Business credit reporting agencies like Dun and Bradstreet and Experian search public records and open business credit reporting files on businesses without your knowledge.
Your business reports are not protected by the Fair Credit and Reporting Act (FCRA). This means:
  • No Formal Dispute Process. There are no established legal remedies for removing information that is not accurate.
  • No Permission required to check your business credit. Anyone can run your business credit without your knowledge or permission. 
  • No Legal Notice of Denial. There is no requirement to provide you notice of why you were turned down or given bad terms.
2. Business names get mixed up
A consumer credit report is created using four items: Social Security Number, Date of Birth, Address, and Name and at least 3 out of the 4 have to match.  This is in place to ensure accuracy of the information.
A business credit report is created by matching the business name and address and neither one has to be exact. This commonly results in two business’s profiles getting mismatched. Imagine how easy it would be for franchises that all share a common DBA (ABN) name to get crossed up!
3. Creditors are not Disclosed 
Many credit-reporting Agencies protect the anonymity of sources that provide them with bill payment records, such as a your suppliers, vendors and other customers. That’s why the creditor names are not disclosed on business credit reports. It is hard to verify or dispute a report when you you do not know who is reporting the information.
Protect your business!
Fixing business credit report discrepancies can be difficult. An survey by the Small Business Administration found that 23% of small business owners had difficulty disputing or correcting a mistake with a debt collector or credit-reporting firm.
The best strategy to defend your businesses credit reports for missing or inaccurate data with a business credit monitoring service is to check it regularly and immediately report errors to the bureaus. Some services will even facilitate the dispute process for you.
Do not delay or overlook even small errors! Something as simple as a wrong  SIC code (used to classify your business industry-type) can lower your credit score. 
 
The best service I have found for this is Creditera; they offer monitoring of your personal credit, business credit and a business credit building program all in one easy to use dashboard. You can receive a free trail for reading this blog by clicking here!

Leave a Reply

Your email address will not be published. Required fields are marked *