Experian business collects, reports, and sells data in the business credit world. Business Credit 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.
Experian is used by many credit card companies and non-traditional business lenders. Experian’s roots track back to 1803. A group of London merchants began swapping information on bad debtors. Official associations began to spring up across the UK to protect merchants offering credit. One of the largest, the Manchester Guardian Society, formed in 1826 and would become an integral part of Experian.
In the US, during the 1850s, the first credit agencies emerged “with the aim of transforming a broad variety of information into a product that could be sold for profit”. One of the earliest US credit agencies, Merchants’ Credit Association, was founded in 1897 by a man called Jim Chilton. Nearly a century later, this would become another foundational part of Experian.
TRW was originally founded in 1901 as the Cleveland Cap Screw Company. They started producing screws and bolts and grew to produce many parts for the aviation and automobile industry. They entered and leaped ahead in credit reporting in 1968 acquiring Credit Data.
In the UK, Experian developed during the 1970’s through Great Universal Stores (GUS), an established retail conglomerate with millions of customers paying for goods on credit. They combined the mail order data from various GUS businesses and created a central database in Nottingham (judgments were later added).
In 1996, TRW changed their name to Experian. November 14, 1996 GUS bought CCN Group and combined them with Experian. Two businesses, each leading the field in their countries were brought together. The merger established a global leader in the market for credit reference and credit risk management services. On 10 October, 2006, Experian was successfully demerged from GUS. The following day, shares were traded for the first time on the London Stock Exchange where they are still traded today.
Experian operates 19 consumer credit bureaus. They maintain information on close to 800 million consumers. Experian operates 13 business credit bureaus. They maintain information on about 99 million businesses, of which 27 million are in US. They are now the second largest reporting agency in the business credit world.
Experian focuses on providing quality data and analytics to businesses to help them better assess risk. They possess a massive consumer and commercial database that they manage to help businesses obtain the best and most up-to-date information. They then extract significant extra value with this data by applying their own proprietary analytics and software.
Experian is known for their merged reports in which they use both consumer and business credit information to gauge risk. “By combining personal and commercial credit information in one report, Experian provides a complete picture of the creditworthiness of small businesses”. Experian is listed on the London Stock Exchange under the symbol (EXPN) and is in a constituent of the FTSE 100 Index.
According to Experian’s 2013 annual report, they earned 4.7 billion dollars in revenue in 2013. About 48% of their revenue came from North America, 21% came from Latin America, 19% came from the UK and Ireland and 12% came from the Asia Pacific.
Experian’s headquarters are in Dublin, Ireland. Experian’s business records are spread over 80 countries that Experian services. Experian’s reach is across four main geographic regions, including North America, Latin America, UK and Ireland, and EMEA/ Asia Pacific.
Besides data collection and business credit reporting, Experian also offers an abundance of other services which include decision analytics which cover areas such as application processing, customer management, fraud solutions and collections analytics. Experian also offers Marketing Services and they offer Consumer Services which include Credit Monitoring and ID Theft Protection.
A typical Experian business credit report will include a company’s registration and ownership details, trading addresses, how quickly the business is paying its bills, a credit risk score, court judgments and history of financial performance. A typical Experian business credit report also includes business background information, company financial information, credit score, risk factors, banking, trade, collection history, liens, judgments, bankruptcies and uniform commercial code filings.
Intelliscore is the main business credit score offered by Experian. Intelliscores range from 0 to 100, with 0 representing a high risk and 100 representing a low risk. The 0-100 is a percentile score that reflects the percentage of businesses that score higher or lower than the specific business being looked at. For example, if the business has a score of 20, this means that company scores better than 19% of other businesses. That also means that 80% of other businesses score higher than that business.
The new Intelliscore Plus has over 800 aggregates or factors that affect the credit scores. Scores are assessed on more than 7.2 million businesses in Experian’s. To configure an Intelliscore for a business, Experian first takes a business and looks at data segments such as firmographics, public records, collections, and trade information, then places each business in one of three different models.
The first model is their Commercial Model, for small, medium, and larger businesses. Their second model is their Blended/Owner Model, where the commercial data is then linked with the owner’s information. Their third model is their Intelliscore Plus, or their percentile score. Intelliscore Plus, just like FICO, has multiple facets to the entire score makeup. The score is still based on the payment history of the business, but many other factors tie into percentages of the overall score.
The Historical Behavior or payment history accounts for 5-10% of the total score. Current payment status, trade balances, and percent of accounts delinquent account for 50-60% of the score makeup. The business’s credit utilization affects 10-15% of the total score. The company profile, age of business, industry risk, and size of business assessed by number of employees accounts for 5-10% of the total score. And 10-15% of the total score is determined based on the derogatory items, collections, liens, judgments, and bankruptcies that the business has.
Data is collected from many sources including credit obligation information from suppliers and lenders, legal filings from local and county and state courts, company background information from independent sources, including state filing offices, public records, credit card companies, collection agencies, corporate financial information and marketing database.
This gathered data is then combined with data from other sources including actual trade payment experiences submitted by payees, public record information, collections information, company background and comparative data that places a company’s payment performance in context within its industry.
Scores are based on a number of factors contained in your business credit report including number of trade experiences, outstanding balances, payment habits, credit utilization, trends over time, public record recency, frequency and dollar amount, and demographics such as years on file, Standard Industrial Classification codes and business size.
From Experian, the Intelliscore is “Calculated by a statistically derived algorithm, designed to determine risk based on multiple factors”. Some of these factors include: Credit, specifically the number of trade experiences, balances outstanding, payment habits, credit utilization and trends over time, Public Records including the recency, frequency and dollar amounts associated with liens, judgments or bankruptcies, and Demographic Information which includes years on file, Standard Industrial Classification (SIC) code and business size.
Data stays on an Experian business report for a certain time frame depending on the type of data. Trade data stays on the report for 36 months. Bankruptcies stay on the report for nine years and nine months. Judgments stay for six years and nine months. Tax liens remain on the report for six years and nine months. Uniform Commercial Code filings stay on Experian reports for five years. Collections remain for six years and nine months. Bank, government and leasing data remains on reports for 36 months.
If you need to dispute certain details on your business credit report, contact Experian Commercial Relations in writing. You will need to provide all of the following:
On the report, circle the specific items in question and provide the correct information. Provide supporting documentation when available.
On current company letterhead, list all variations of your company name and any “formerly known as” names that your company has operated under for the past 10 years. List your company’s current and previous addresses (physical and Post Office Box addresses) for the past 10 years. And provide the signature and the phone number of an officer of the company.
Once you have this information gathered, send it to: Experian — Commercial Relations
PO Box 5001, Costa Mesa, CA 92628-5001 or fax this information to: Experian — Commercial Relations, 1 714 830 2903. Contact us today to learn more about building your business credit profile and score with Experian!
Experian is an important player in the business credit world. Insure you build your business credit with Experian to have a well-rounded business credit report that gives you the best chance of obtaining financing and credit for your business.
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