According to the Corporate Finance Institute, the financial position of the borrower and the quality of management are two of the most important things in evaluating credit risk. An Experian Business Owner Background Report can help detect patterns of prior poor management performance that can increase your risk and probe for warning signs of fraud.
Why use Business Owner Background Reports?
A Business Owner Background Report shows a business principal’s total liability across the businesses they are currently associated with and provides a powerful investigative tool that assists with verifying the individual’s signing authority and provides indicators for potential fraud.
You can find out the total liability across all businesses owned or managed by principals, including outstanding balances and potential credit line exposure, look for patterns of poor management in current or previous employment and verify individuals applying for credit are authorized representatives of the business.
These are the types of reports that are available.
- Linkage: Principal’s identifying information, current and previous businesses, strength threshold for each linkage, title for each linkage, and commercial attributes for each linked business.
- Fraud: Linkage content plus BizID Consumer Risk Score, reverse address & phone, individuals with common businesses, and OFAC checks.
- Comprehensive: Provides Linkage & Fraud content plus consumer credit report/score.
The Association of Certified Fraud Examiners (ACFE) estimates that businesses lose an average of 5% of their revenue to fraud each year. Globally, that adds up to more than a trillion dollars lost each year. With an Experian Business Owner Background Report, you can mitigate your risk by examining information such as:
- Address history
- Current business affiliations
- Former business affiliations
- Business performance metrics
- Dates of association (and disassociation) with businesses
- Legal name and D/B/A search
- Active and closed businesses
- Potential warning signs of fraud or illegal activity
You also get commercial portfolio information so that you can view total balances and credit utilization. This information helps you see if they own several business ventures, for example, and one of them is in financial distress, which might impact their ability to pay their bills. If you have concerns about collections, you can also locate potential business assets and alternate locations for commercial collections or skip tracing.
A comprehensive report can also include Experian business owner background report information, such as a full consumer credit report and consumer credit score.
Request a consultation with the experts at Command Credit to see how using Business Owner Background Reports can help protect your business.