How to Read a Business Credit Report

Credit-reporting agencies maintain credit reports with information about businesses just as they do for customers. However, because of the differences in the way businesses and consumers transact business, a business credit report contains different information, and is formatted differently, from a consumer credit report. You can learn to read a business credit report by understanding the main type of information in each section of a typical report.

Difficulty: Easy

Instructions

1. Read the identity section. This section lists information such as the business's main office address, telephone number and the names of the business's executives.

2. Read the credit and payment summary sections. The key figures to note are the credit ranking score, which is the business's equivalent of a consumer FICO score, and the payment trends charts, which graphically summarize the business's payment history.

3. Read the detailed trade payment information. The trade payment sections cover the business's month-by-month payment history, with outstanding balances, payment terms and length of credit relationships.

4. Read the collection information sections. This section lists the entities that filed for collections, any payments made against the collection account and any outstanding disputed balances.

5. Read the banking, insurance and leasing information sections. These sections provide information about the business as a going concern, such as corporate debt and the terms and lengths of the business's commercial real estate leases.

6. Read the judgments, liens and Uniform Commercial Code filings sections. These sections cover actions, if any, taken against the business by federal, state and local governments and report the status of the action.

References

• Sample Business Credit Report From Experian

Resources

• Business Credit Information From the Federal Trade Commission

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