YOUR LOGO HERE How to Repair Damaged Business
YOUR LOGO HERE How to Repair Damaged Business Credit
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Business Credit • Business Credit is credit that is obtained in a Business Name • With business credit the Business builds its own credit profile and credit score • With an established credit profile and score, the business will then qualify for credit
Business Credit • This credit is in the business name and based on the business’s ability to pay, not the business owners • Since the business qualifies for the credit, in some cases there is no personal credit check required from the business owner
Business Credit • The business can use its credit to qualify for revolving store credit cards like Staples, Lowes, Sam’s Club, Costco, BP, Wal-Mart, even Master. Card, Visa, and AMEX • The business can also qualify for credit lines and loans
Business Credit Benefits • A credit profile can be built for a business that is completely separate from the business owner’s personal credit profile • This gives business owners DOUBLE the borrowing power as they have both Personal and Business credit profiles built
Business Credit Benefits • Business credit scores are based only on whether the business pays its bills on time • A business owner can obtain credit much faster using their business credit profile versus their personal credit profile.
Business Credit Benefits • Approval limits are much higher on business accounts versus personal accounts • Per SBA, credit limits on business cards are usually 10 -100 times higher than consumer credit
Business Credit Benefits • When done correctly Business Credit can be built without a personal credit check • Business credit can quickly be obtained regardless of personal credit quality
Business Credit Benefits • Most business credit can be obtained without the owner taking on personal liability, or a personal guarantee • This means in case of default, the business owner’s personal assets can’t be pursued
Business Credit Reporting Agencies • There are three major companies that collect business information and publish it • These are Dun & Bradstreet, Experian, and Business Equifax • D&B is by far the largest, but the other two are catching up quickly
Dun & Bradstreet • Dun and Bradstreet is the biggest and major business credit reporting agency • Dun and Bradstreet is a publically traded company with a headquarters in Short Hills New Jersey, and trades on the New York Stock Exchange
Dun & Bradstreet’s Score • The main credit score used in the business world is known as a Paydex score, provided by Dun and Bradstreet • The Paydex score ranges from 0 -100, with 100 being the best score a business can obtain
Experian • Experian was formerly a division of TRW, an automotive electronics giant • TRW was originally founded in 1901 as the Cleveland Cap Screw Company • Experian’s most recent score system is known as Intelliscore Plus, which they boast of as the next level in credit scoring
Equifax • Equifax is called the “Small Business Financial Exchange” and is the most important for cash lenders such as banks • Equifax’s main business credit scoring model is the Credit Risk Score • Credit scores range from 1 -100, with a lower score indicating a higher risk of serious delinquency
How to Fix Damaged Business Credit
Most Don’t Report • Many business owners think they have items reporting on their business credit reports that really aren’t reporting • Over 90% of trade vendors don’t report to the business CRA’s • So chances are good that the negative information you think is on your report might not even be there
Notices • Remember most don’t report to the business CRA’s, so when they do they also send alerts • The creditor will almost always notify you in writing before they report the data to the business credit reporting agencies • They will even notify you multiple times in some cases that they are about to report the item on your report
Notices • In many cases reporting agencies like Experian will notify you before they report • They might even send you 3 or more notices CLEARLY telling you that someone is about to report something negative on your report and advising you to call the creditor and resolve the dispute
Obtain Business Credit Reports • Business Credit reports are offered by Experian, Dun & Bradstreet, and Equifax • You will first want to get a copy of your business credit reports to see what is being reported
Dun & Bradstreet • You can also enroll for the DNBi Self. Monitor to monitor your credit during the building process • http: //mycredit. dnb. com/monitor-businesscredit/ • A subscription for D&B Self Monitoring is $39 -99 per month
Experian • Visit https: //www. experian. com/smallbusiness/business-credit-reports. jsp for a copy of your Experian report • $36 -175 for report
Equifax • You can purchase a copy of your Equifax Small Business Credit Report here http: //www. equifax. com/small-business/creditreport/en_sb • $99 for a full report
FCRA • The Fair Credit Reporting Act outlines consumer’s rights to dispute inaccurate information on their credit reports • This law does NOT apply to business credit repair • There is no currently laws which outline business owners rights regarding credit disputing
FCRA • The FCRA also requires credit issuers to notify you of what bureaus they pulled to determine your denial for financing • In the business credit world this is not the case, you rarely ever know the source pulled your business credit or which reporting agencies they pulled it with
Debt Validation Letter • If you see accounts or details you don’t recognize or you feel are inaccurate, request a debt validation for that account • A debt validation is where you solicit the creditor for verification of the account details they are reporting • They will typically send you back details of your account that they are reporting
Debt Validation Letter • The FCRA and FDCPA apply to consumer debts, not business debts • So you can send a debt validation letter, but the creditor is not required by law to respond to your dispute
Debt Validation Letter • Your request must be sent to the creditor in writing • Dispute the debt with the credit reporting agencies • If no response is received within 30 days of mailing the letter, then you should then dispute the account with the business CRA
Disputing with the CRA • Contact customer service with any of the three reporting agencies for billing disputes, challenging payments and outdated public filings that appear on your report • When you dispute an item they business CRA will have vendors reverify payments and remove charges if the vendor cannot verify the information
Disputing with the CRA • The business CRA’s can also help to clear up issues that have been settled or dismissed, yet still appear in your report • You may be asked to send in documentation to verify a settlement or dismissal • The business CRA will recheck the status of the public filing if you do not have documentation
D&B i. Update • i. Update provides US based Small Businesses and Non-publicly traded companies convenient access to D&B's information on their business • Registered users can view, print, and submit updates to their D&B Business Information Report
D&B Credibility • D&B Credibility provides credit monitoring services through D&B, not D&B themselves • Do NOT get upsold by DBC • You do NOT need their business credit building package as it really won’t help you
Experian • http: //www. experian. com/smallbusiness/business-credit-information. jsp • Or Google “Experian update business credit”
Equifax does provide dispute services through their online credit monitoring platform in their member center under “Disputes”
Tip • Keep in mind, the business CRA may not be allowed to release the name of the person making the reference on your report • REMEMBER, you don’t have the same rights as you do with consumer credit reporting as there is no FCRA • However, you can contact customer service to discuss the item on your report as well as your options
Settling the Debt • If your debt validation and investigation don’t net you the deletion, next you need to contact the creditor • Find out from them what you must do to have the item removed from the business credit report • Usually, they will remove the account if you pay the outstanding debt
Settling the Debt • The main reason for a derogatory item to be on the report is usually because the creditor feels there is an outstanding balance owed • So they will typically remove the account if you pay the outstanding debt
Settling the Debt • If you reach an agreement for deletion, get the agreement in writing • And insure they provide you a time frame of when they will correct the damage on your report
If all Else Fails… Build Your Business Credit
Building New Credit • Business credit scoring is based on how you pay your bills • If you pay the majority of reported accounts on time or early, you will have a good score
Building New Credit • Most business owners have little to no credit reporting • So even one negative account can have a BIG impact on the business credit score
Building New Credit • It is essential that you continuously build your business credit profile just as you do with your consumer credit • One of the best ways to battle negative information on your report is to offset it with LOTS of positive information
Building New Credit • One of the best ways to battle negative information on your report is to offset it with LOTS of positive information • Continuously build your business credit profile just as you do with your consumer credit
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