A basic business credit report helps small business owners identify a potential non-paying customer before entering into a business relationship by providing valuable insight into a company’s payment history, credit worthiness and financial health. Each report includes important information on a prospective client, including how quickly the company pays its bills, how much credit it should be extended and if there are any legal proceedings against the company.
Despite the myriad benefits of a credit report, a lot of small business owners don’t use this financial tool as a part of their risk management strategy. In fact, we’ve found that a lot of companies that use credit reports – many of them small businesses – are first time users.
Here are 3 common misconceptions about credit reports that way too many small business owners believe.