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More from Ty Crandall, Business Credit Expert
How to Repair Damaged Business Credit
- 1. How to RepairDamaged Business Credit
- 2. Ty Crandall Director ofBusiness Services (877) 600-2487 [email protected]
- 3. Business Credit • BusinessCredit 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
- 4. Business Credit • Thiscredit 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
- 5. Business Credit • Thebusiness can use its credit to qualify for revolving store credit cards like Staples, Lowes, Sam’s Club, Costco, BP, Wal-Mart, even MasterCard, Visa, and AMEX • The business can also qualify for credit lines and loans
- 6. 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
- 7. 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.
- 8. 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
- 9. 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
- 10. 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
- 11. Business Credit ReportingAgencies • 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
- 12. 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
- 13. Dun & Bradstreet’sScore • 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
- 14. Experian • Experian wasformerly 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
- 15. Equifax • Equifax iscalled 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
- 16. How to FixDamaged Business Credit
- 17. 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
- 18. Notices • Remember mostdon’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
- 19. Notices • In manycases 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
- 20. Obtain Business CreditReports • 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
- 21. Dun & Bradstreet •You can also enroll for the DNBi SelfMonitor to monitor your credit during the building process • http://mycredit.dnb.com/mon itor-business-credit/ • A subscription for D&B Self Monitoring is $39-99 per month
- 22. Experian • Visit https://www.experian.com/small- business/business-credit-reports.jspfor a copy of your Experian report • $36-175 for report
- 23. Equifax • You canpurchase a copy of your Equifax Small Business Credit Report here http://www.equifax.com/small-business/credit- report/en_sb • $99 for a full report
- 24. FCRA • The FairCredit 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
- 25. FCRA • The FCRAalso 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
- 26. 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
- 27. 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
- 28. 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
- 29. Disputing with theCRA • 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 re-verify payments and remove charges if the vendor cannot verify the information
- 30. Disputing with theCRA • 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
- 31. D&B iUpdate • iUpdateprovides 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
- 32. D&B Credibility • D&BCredibility 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
- 33. Experian • http://www.experian.com/small- business/business-credit-information.jsp • OrGoogle “Experian update business credit”
- 34. Equifax Equifax does providedispute services through their online credit monitoring platform in their member center under “Disputes”
- 35. Tip • Keep inmind, 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
- 36. 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
- 37. 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
- 38. 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
- 39. If all ElseFails… Build Your Business Credit
- 40. 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
- 41. 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
- 42. 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
- 43. 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
- 44. Learn more aboutbusiness credit at www.CreditSuite.com Ty Crandall 877-600-2487 [email protected]