Supplementing a Scanty Credit Report

Credit reports that contain little information are frustrating for any credit/finance executive who's considering extending open account credit to a new debtor or increasing its exposure to an existing customer. What can you do when debtors refuse to furnish a credit reporting agency the information you need to make a sound credit decision? First of all, credit reports should always be pulled on new debtors that ask for extensive open account lines of credit. For existing customers, however, there is often no need to pull a "comprehensive" credit report on a company if you have one that is less than a year old and if you have done so in the past. Many credit reporting agencies charge you full price for these reports that often contain little more than trade references. Why pay for something you know you will not be able to use! What to do?

Begin to paint a picture of the company and its principals. Even if a debtor refuses to furnish financial statements, antecedent information, etc., the extensive searching abilities or engines such as Google and others can help you find information on officers, individuals and companies that can often begin to paint a picture of the company and of its creditworthiness. For example, searching for information on XYZ Company may generate a local newspaper article on XYZ winning a prestigious environmentalist of the year award. The article may also give you information on the principals and business that gives you a "sense" this company may be worth selling to.

This often takes time, but if you are considering dramatically increasing a debtor's line of credit it is often time well spent.

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