As a business owner, you understand how having a strong credit score can improve your chances at securing funding at affordable rates and attracting new customers.
Gaining access to solid credit data about other companies can be just as crucial to your success. In fact, having this kind of analysis at your fingertips will help you find more reliable customers and business partners, while avoiding some regrettable decisions.
Many financial services companies offer their clients free access to credit information. However, the quality and accuracy of that data can vary greatly. Below are six questions that can help you find the right credit service provider for your trucking fleet:
What kinds of companies are covered?
If you operate a trucking business, you’re probably most interested in credit information on freight brokers and companies that ship freight. The credit service provider you select becomes more valuable if it has information on many entities—look for one that follows tens of thousands of companies.
How up-to-date is the information?
Credit scores and other information are not helpful if they are not updated regularly. You need a credit service that provides daily or weekly updates, as well as immediate alerts on credit rating downgrades.
How in-depth is the analysis?
Ask a credit service agency to show you a sample credit report that includes all the information they share about a company. Ideally, this information should include a credit rating, average days-to-pay, surety bond and trust information and whether the company has an active Department of Transportation authority.
How is the credit rating calculated?
Seek a provider that gets its credit information from a wide variety of sources, including other business credit services, government agencies, business and bank references, public SEC filings and other financial statements. If a credit agency draws from numerous sources, its scoring system will be more accurate and up-to-date.
Is the data accessible and easy to understand?
You should not have to be a financial expert to read a credit report. Look for a credit service provider with a rating system that is simple and easy to understand, while providing the key information you need to make an informed business decision. For example, some providers offer a letter-grading system (“A” to “F”) that any customer can quickly understand and interpret.
Is the credit service provider independent or part of another business?
Choosing a provider that is the credit arm of a larger business entity can work to your advantage. It can make the credit service more affordable or even free if you are a client of the affiliated business. The relationship may also include free customer collections and other back-office services for your company. Additionally, the credit service provider may have better data if it has access to financial information that the larger company collects from its own customers and business partners.
To learn more about how credit information can help you make the best business decisions, visit RTSCredit.com or call (877) 577-7936.