An Experian business credit report can provide you with a company’s business credit score and business credit history, and highlight any liens, judgments, or bankruptcies associated with their business. Many companies choose to take a more comprehensive look at business owners using the Experian business owner profile report.
Especially for small businesses, it is common for owners to count on their personal worth to meet business obligations or take out loans. For example, a business owner may take a home equity loan or fund the business with personal credit cards. Neither of these items would show up on a standard business credit report. If someone has serious personal debt that may threaten the ability of their business to pay its bills, however, these items would show up on a business owner profile report.
The Experian business owner profile report checks both the business credit and personal credit history of the owner or proprietor to help assess overall creditworthiness. It helps you avoid high risk while identifying businesses with good credit habits that may lead to new opportunities.
We have put together this short guide to help you understand what appears on an Experian business owner profile report and what the information means. The summary page of the report has two sections:
- Identifying information
- Executive summary
Identifying information matches the business with its owner and provides the home address and up to two previous addresses. If they currently have another job, it will list that as well as their next-most recent employer.
The executive summary is broken into several sections that give you a quick overview of the company. This section includes:
- Consumer credit score: The credit score can be FICO, or VantageScore, , indicating the business owner’s consumer credit score.
- Trade payment status: The trade payment status section summarizes the company’s credit history, including paid and satisfactory trade, past delinquencies, and current delinquencies along with the number of trades/credit lines.
- Legal filings: This lists a summary of any legal filings, such as bankruptcies, tax liens, and judgments. You can see a breakout of the items later in the report.
- Delinquent payments: The delinquent payments section shows a summary of past due amounts and any that are in dispute.
- Inquiries: You can see how many credit inquiries have been made on the credit report in the previous six months. Details of inquiries are included later in the report.
The executive summary on the Experian business owner profile report also includes a payment information section that includes several important items to help you evaluate the financial health of a business owner. These include:
- Current monthly payments on outstanding loans
- Installment loans (number and balances)
- Revolving charges (number and balances)
- Revolving charge credit utilization (percentage)
- Real estate loan balances
This payment information section can quickly show you how much debt a business owner has and whether they are using credit wisely. When a business owner is overextended with credit, you should be cautious about extending additional credit to their business.
The rest of the Experian business owner profile report contains the details about legal filings, credit inquiries, and trade payment information showing individual accounts, balances, and payment history. While the executive summary provides you with an overview, you can examine the details on each account, including status and delinquencies.
Other items include a consumer’s statement. This provides a way to let you know if a consumer disputes charges or suspects fraudulent activity on their account.
When working with new customers or suppliers, businesses also need to be on guard against fraud. Billions of dollars are lost every year to business-to-business (B2B) and consumer fraud. The Association of Certified Fraud Examiners (ACFE) estimates that the average business loses up to 5% of its revenue every year to fraud.
Besides consumer statements, there are two other ways you can check for fraud with the Experian business owner profile report. The report includes a check of the records from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC). Names and identifying information are matched against the OFACs list of Specially Designated Nationals (SDN) or other sanction lists. If there is a match, it may be an indication of fraudulent activity, individuals suspected of illegal activity, or companies controlled by countries on terror watch lists.
You may also get warnings for other activity that looks suspicious, such as credit established before a Social Security number was issued, a probability that a Social Security number belongs to someone else, or information provided that is inconsistent with identifying information.
Request a consultation to learn how using Experian business owner profile reports and Experian business credit reports can help you and protect your business from unnecessary credit risks.