Using Business Credit Reports

In my previous posts i talked about USA consumer bureau report contents. In this I will discuss USA business credit report content.

Major of the Reports come in two types:

1. Based on Trade Tape Data [Account Receivable Data]
   
2. Based on Financial Data

In both the reports firmograph [Company Name, Address, Company hierarchy information and key contacts at the company] data is common.

1. Based on Trade Tape Data:

 

Every small and big company does business among each other and all the bureaus collect this information from the companies willing to share. Industry term for this data is trade tape file. There is a some sort of industry standard reason every bureau does not want to share there trade secrets. Bureaus clean, collate and apply there so called secret logic to come up with a payment score. There are two types of score, one is called current score and second is predictive payment score based on the past and current data. More information on the score differences in the future blogs.  

Usually to buy bureau reports you need to be a contributor some of the bureaus do not insist on this. 

2. Based on Financial Data:

This is a straight forward report it contains a score derived from current and past financial and contains companies financial line items. Private companies that do not share financial to the world, secretly share with bureaus for their own well being. It is up to end company to trust private companies financial. For the public companies financial data is available freely on EDGAR database.

Credit Manager buy bureau reports based on there company risk policies. Usually all the credit managers do not make credit decision just based on bureau score. They do additionally analysis on top of the score.