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Entrepreneurs Advised to Check Business Credit Report

By Faye Mergel
Published: Monday, December 21st, 2009

Doing business involves a lot of risks but entrepreneurs can minimize them if they know how well their potential partner is doing financially. They can do this if they pull out a business credit report, which tells them everything they need to know about a company.
A business credit report is a document which shows the financial standing of a company. According to finance specialists, many companies get into risky investments and partnerships because of their lack of knowledge about their     partner. The document contains information about a business person such as his present financial situation and his credit history. It also records public records like foreclosures, insolvency, and court judgments.

Entrepreneurs Advised to Check Business Credit ReportAside from checking their potential partner’s business report, entrepreneurs are also advised to keep track of theirs to fairly assess their financial situation. Experts say it is very important for entrepreneurs to keep a good business credit report so when the time comes for them to apply for a loan or any other form of financial assistance, they can easily get one without difficulty. More importantly, it will allow them to borrow at low interest rates. Specialists remind business owners that lenders check the creditworthiness of a company before making decisions so they pull out a company’s credit report.

Experts also tell companies that a good credit report is likewise helpful in attracting and keeping clients and in keeping ahead of customer interests. It helps firm owners know their clients’ credit and fraud risks while keeping them on track with new target marketing offers. They add that it can also be helpful when it comes to decision making.
Industry specialists say a business report can be obtained from different information-providing companies and from the credit bureaus. Those companies compile a credit report and provide them to consumers and businesses when they request for it.

Entrepreneurs looking to know more about a potential partner can pull out his report without asking for consent. However, they cannot use it for any other purpose. The three major bureaus where companies can check a business, and even their clients’, report are Experian, Equifax, and TransUnion.

Specialists note that the bureaus normally require payment before giving a business credit report but entrepreneurs can get one for free in some cases. For instance, they can do so if they apply for a credit card or loan under their company’s name and get rejected. In such cases, entrepreneurs are advised to send a copy of the rejection letter along with and a letter asking for a business credit report to the reporting agency listed.

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