Credit reports can provide small businesses with information to make informed lending decisions.
Credit reporting agencies (CRAs) gather and sell credit information in the form of credit reports. Credit reports contain credit histories that include the number of credit lines or loans, credit scores, outstanding loan amounts, payment histories, liens, judgments and bankruptcy information. Small businesses can obtain credit reports by purchasing them from a credit reporting agency. This can provide them with information to make informed lending decisions, thereby reducing the risk of default or bad debt.
Instructions
1. Contact a credit reporting agency to obtain a credit report. Companies like Experian, Equifax, Trans Union and Dun & Bradstreet compile and sell credit reports. Small businesses can call them to inquire about purchasing credit reporting information. Some agencies have an online registration form you can complete. Once your registration is approved, you can order credit reports online.
2. Purchase the credit agency's report. For credit report requests on consumers and businesses not listed in a credit agency's database, a credit check will be conducted. After the credit check is complete, the credit report will become available. This may take a few days to complete, depending on how difficult it is to gather the information.
3. Obey credit information confidentiality and privacy laws. Consumer credit information cannot be disclosed to third parties without the consumer's consent, except to an attorney or by judicial decree. Credit report Information that is disclosed to other parties may be in violation of the Fair Credit Reporting Act (FCRA). Credit reporting agencies will want to know how small businesses intend to use the credit information and will require it be kept confidential.
