Credit reports are now a vital part of running a business but unfortunately, the act of credit reporting has not been adopted by all of the companies and business owners that we speak to; credit reporting doesn’t even factor into their procedures. Usually, we are given several reasons why our clients aren’t checking the credit reports of new customers but most of these reasons are invalid. Luckily, Commercial Domestic Investigations are on hand to dispel these myths.

If you settle a CCJ it’s wiped from your report

If a company has a CCJ filed against them, it can indicate that they regularly miss payments and if you have access to this information you are able to protect your business from potential damage. A company has to act fast in order to clear a CCJ from their report, paying the debt within a month. If they don’t clear the debt then the CCJ will remain on the report for six years.

Regular monitoring will damage your score

Commercial reports are different to consumer reports, you can regularly check and review your report without the risk of damaging your score. In fact, we strongly recommend that you monitor your report to stay ahead of any inaccuracies that may arise.

Credit blacklists

Contrary to what you may think, credit blacklists do not exist. Credit reports are a device used to inform and advise the reader, ultimately the decision is up to them. In the UK, a credit score will sit somewhere on a scale between 0 and 100, for this reason, a blacklist would be obsolete. Anyone with a score less than 30 would be considered very high risk, a score between 50 and 75 would be considered medium to low risk and above 76 and the client is very low risk. These scores will act as a guide, to inform you how reliable a company is when it comes to payments.

Reports are expensive and time-consuming 

While business credit reports are not free like personal reports, they are cheaper than the potential debt that you may be stuck with if you do not check a report. The report doesn’t take up much of your time, especially when you have all of the necessary information, after the initial report you can regularly monitor your clients to stay up-to-date with their financial habits.

Being turned down for trade credit will impact your report

If you are trying to negotiate a line of credit with a supplier and they turn you down, this will not show up on your credit report, nor will it impact your credit score. Trade credit is between you and your supplier. A credit report is a tool that can be used to inform a decision whether to trade with you or not.

At Commercial Domestic Investigations, we know how important it is for your business to succeed. We advise all of our clients that credit reporting is the first step to protecting yourself against late payments; if you want to discuss credit reporting in further detail contact our team on 08444 159200 or email sales@commercialdomesticinvestigations.co.uk.