Published By Janet Gershen-Siegel at October 24th, 2014
Do you know how to fix business credit? Knowing how to repair your damaged business credit is vital for you, the business owner. Many think they have certain accounts reporting on their business credit reports, when in fact they really aren’t reporting. In fact, only 7% of trade vendors report positive payment experiences to the business credit reporting agencies. So chances are good that the negative information you think is on your report might not even be there. But you should still know how to repair your damaged business credit.
Know what’s on your business credit you should get business credit reports from the main business credit reporting agencies.
Business Credit reports are offered by:
You will first want to get a copy of your business credit reports to see what is being reported. So saving damaged business credit starts here.
You might have already heard of the FCRA. The Fair Credit Reporting Act outlines consumer’s rights to dispute inaccurate information on their credit reports. But it’s essential to know that this law does NOT apply to business credit repair.
There are currently no laws which outline business owner’s rights regarding credit disputing. The FCRA also requires credit issuers to tell you which bureaus they pulled your credit data from. This was to determine your denial for financing. But in the business credit world this is not the case. You rarely ever know the source pulling your business credit or which reporting agencies they pulled it with.
If you see accounts or details you don’t recognize or you feel are inaccurate, here’s what to do. You can ask for a debt validation for that account using a debt validation letter. A debt validation is where you solicit the creditor for verification of the account details they are reporting. They will typically send you back details of your account that they are reporting.
But remember: the FCRA and the fair debt collections practices act apply to consumer debts, not business debts. So you can send a debt validation letter. But the law does not require the creditor to respond to your dispute.
When sending a debt validation request, you must send your request to the creditor in writing. Also make sure you dispute the debt with the credit reporting agencies if the creditor doesn’t respond to your request. If no response is received within 30 days of mailing the letter directly to the creditor, then you should then dispute the account with the business credit reporting agencies.
Know what is happening with your credit. Make sure it is being reported and attend to any inaccuracies as soon as possible. Get in the practice of checking credit reports. Dig into the details, not just the scores.
Update the relevant information if there are mistakes or the details is incomplete. At D&B, you can do this at: https://www.dnb.com/duns-number.html. For Experian, go here: www.experian.com/small-business/business-credit-information. So for Equifax, go here: www.equifax.com/business/small-business.
To dispute a debt with the business credit reporting agencies, first contact customer service with any of the three reporting agencies for billing disputes, challenging payments and outdated public filings that appear on your report.
When you dispute an item the business reporting agencies will have vendors re-verify payments and remove charges if the vendor cannot verify the information. Credit repair services might also be good for this.
The business credit reporting agencies can also help to clear up issues that have been settled or dismissed, yet still appear in your report. They may ask you to send in documentation to verify a settlement or dismissal. The business credit reporting agency will then recheck the status of the public filing if you do not have documentation. If you are working with companies which know how to repair damaged credit, they should have experience with these kinds of requests.
So, what’s all this monitoring for? It’s to dispute any problems in your records. Mistakes in your credit report(s) can be fixed. But the CRAs generally want you to dispute in a particular way.
Get your small business’s PAYDEX report at: www.dnb.com/about-us/our-data.html. Get your company’s Experian report at: https://www.businesscreditfacts.com/pdp.aspx?pg=searchform. And get your Equifax business credit report at: https://www.equifax.com/business/credit-information/.
Disputing credit report errors means you specifically detail any charges you dispute.
Dispute your or your small business’s Equifax report by following the instructions here: www.equifax.com/small-business-faqs/#Dispute-FAQs.
You can dispute inaccuracies on your or your small business’s Experian report by following the directions here: www.experian.com/small-business/business-credit-information.
And D&B’s PAYDEX Customer Service telephone number is here: www.dandb.com/glossary/paydex. D&B still wants you to dispute by phone.
Dun and Bradstreet provides US based small businesses and non-publicly traded companies convenient access to D&B’s information on their business. Registered users can view, print, and submit updates to their D&B Business Information Report.
So many business owners don’t know that credit monitoring services for Dun and Bradstreet reports actually come to you from a private company known as D&B Credibility.
Equifax Business also has an online system for credit disputing. They provide this through their online credit monitoring platform in their member center under Disputes. Keep in mind, the business credit reporting agencies may not be allowed to release the name of the person making the negative reference on your report.
But keep in mind, you do not have the same rights as you do with consumer credit reporting as there is no Fair Credit Reporting Act. However, you can contact customer service to discuss the item on your report as well as your options.
Contact the Creditor to Help Repair Your Damaged Business Credit
If your debt validation and investigation don’t net you the deletion of the derogatory item, move to the next step. Now you need to contact the creditor. Find out from them what you must do to have the item removed from the business credit report. Usually, they will remove the account if you pay the outstanding debt.
There is one main reason for a derogatory item to be on your business credit report. So it is usually because the creditor feels there is an outstanding balance that you owe them. So they will typically remove the account if you pay the outstanding debt. If you reach an agreement for deletion, get the agreement in writing. And insure they provide you a time frame of when they will correct the damage on your report.
Start with vendor credit. It’s a great way how to repair bad credit fast.
First you should build trade lines that report. This is also called vendor credit. Then you have an established credit profile, and you’ll get a business credit score.
And with an established business credit profile and score you can start to get retail and cash credit.
These sorts of accounts have the tendency to be for the things bought all the time. For example marketing materials, shipping boxes, outdoor work wear, ink and toner, and office furniture.
But first of all, what is trade credit? These trade lines are credit issuers who give you initial credit when you have none now. Terms are ordinarily Net 30, instead of revolving.
So, if you get approval for $1,000 in vendor credit and use all of it, you need to pay that money back in a set term. For example, within 30 days on a Net 30 account.
To launch your business credit profile properly, you should get approval for vendor accounts that report to the business CRAs. When that’s done, you can then use the credit.
Then repay what you made use of. And the account is on report to Dun & Bradstreet, Experian, or Equifax. This the way how to build credit fast.
These vendors can help you build business credit in 30 days!
You want 3 of these to move onto the next step, which is retail credit. Here are some stellar choices from us: https://www.creditsuite.com/blog/5-vendor-accounts-that-build-your-business-credit/
Non-Reporting Trade Accounts can also be helpful. You want trade accounts to report to at least one CRA. But a trade account which does not report can also be of some worth.
You can always ask non-reporting accounts for trade references. Additionally credit accounts of any sort should help you to better even out business expenses. This makes financial planning easier. These are companies like PayPal Credit, T-Mobile, and Best Buy.
You may be asking: what is a good way to repair damaged credit? By building more and more positive payment experiences, you get a terrific way how to repair damaged credit history.
You may also be asking: how to get a line of credit for my business? More business credit means you can eventually work out how to qualify for a business line of credit. You could get an unsecured business line of credit no doc. Improved business credit also means being eligible for the best credit card to have to repair damaged credit.
Having better business credit is an important part of how to apply for a business line of credit. Because you will likely need improved business credit for an online business line of credit. Raising your business credit scores and fixing problems is the best way how to establish a business line of credit.
Business credit scoring is based on how you pay your bills. If you pay the majority of reported accounts on time or early, you will have a good score. But most business owners have little to no credit reporting. So even one negative account can have a BIG impact on their business credit score.
The key thing to remember when thinking about how to repair business credit is it essential that you continuously build your business credit profile just as you do your consumer credit. One of the best ways to battle negative information on your report is easy. You need to offset it with LOTS of positive information. So continue building credit for your business just as you do with your consumer credit.
For more information, check out this fantastic post from Straight North. It’s all about Do’s and Don’ts for your business credit score.
Check out all of the necessary details. And find out how we can help you build business credit.