How the Best Business Credit Reporting Companies Help the Global Credit Systemby Kristen White Blogger
In 2017, one of the leading credit reporting companies of the world, Equifax, was hacked, and the sensitive information of 147.9 million U.S. citizens was compromised. The Social Security numbers, names, birthdates, and other personal information of millions of people and businesses were stolen in this unprecedented heist. Three years later, the Department of Justice finally determined that the offender was China.
According to the United States Justice Department, four prominent Chinese military members were behind the 2017 hack into Equifax. Why did they steal Equifax’s financial data? According to these hackers and many others who steal financial data, your credit status is directly linked to your financial well-being. Chinese hackers stole Equifax’s financial data because they wanted to determine which intelligence officers had financial issues and would be open to receiving bribes or prone to blackmail.
The credit reporting giant Equifax has stepped up its efforts to secure consumer data since 2017. But the underlying essence of this news story is that credit status matters, and so do credit reports.
The Importance of Credit Reports
The best business credit reporting companies serve as the backbone of the American economy. How? Well, the credit system of this country is far from perfect. Recent privacy and consumer protection issues have further diminished public trust in the country’s credit industry. But, without credit reporting, the economy would go into crisis mode.
Without efficient and accurate credit reporting, lenders will not have any information about the people or businesses borrowing money from them. Their only defense mechanism would be charging outlandish interest rates. With highly efficient credit reporting companies, there is efficient sharing of data. Banks and lenders get a clear idea of what type of risk they are entering with each borrower.
In Brazil, the average bank lending rate is 53%. These sky-high lending rates prevent the consumption-dependent Brazilian economy from achieving financial transparency. Credit is a risky and trap-laden game for businesses, as there is no trust in the market. News stories like the Equifax hacking scandal may cause people to assume that the credit system as a whole is broken. But, without these credit reporting agencies, credit would rapidly become excruciatingly expensive for small businesses.
What This Means for Small Businesses
Small businesses must start viewing the best business credit reporting companies as sources of business intelligence. The data provided by these companies can help them:
· Manage their business properly (so that their credit scores are always at satisfactory levels).
· Qualify for business loans. The better your business credit score, the better your chances of landing business loans from leading banks.
· Understanding the risk profile of clients, vendors, suppliers, partners, consumers, etc. Without knowing a third-party entity’s credit score and profile, no small business should extend credit terms.
For small businesses, all credit scores matter. So, businesses must find sources and providers who offer them their TransUnion Company Business Credit Report, Dun & Bradstreet credit score, and Experian and Equifax credit reports. Assessing your credit score and the credit score of your clients, suppliers, vendors, etc., can help you minimize business risk, improve cash flow, and maximize your commercial success.
Created on Feb 22nd 2021 23:36. Viewed 174 times.