You Need All Three Views for an Accurate Credit Picture

Most business credit issuers know that there are multiple sources of credit information on their customers. Just as there are three major consumer credit bureaus, there are also three major business credit bureaus. They are D&B, Experian and Equifax. While the information carried by the three consumer credit bureaus – Experian, Equifax and Trans Union – is very similar, the same doesn’t hold true in the business credit world. Each of the three major business credit bureaus offers a different perspective on each of your customers. In order to get the complete picture, you need to leverage all three.

Why is this so? Each is a separate corporation, with its own strengths and weaknesses, that competes with the others. They do not share information and have different methods for data collection, scoring and delivery of data. Most credit issuers report to only one of the bureaus, which means that payment experience will appear on only one of the three competing credit reports. The result is you could likely see very different evaluations on the same company, depending on which bureau you use as a data source.

D&B has been creating business credit reports the longest. They have the most high-dollar wholesale and manufacturing trade payment information. They also provide public record and UCC data as well as the best company demographic information available. D&B is a great choice for granting credit to larger businesses.

Experian has the most trade payment information on small businesses. Experian is also the leader in small business collections information, with over 250 commercial collection agencies reporting into their database. They are also strong in public record (bankruptcy, lien, judgment) and UCC data. Because Experian is also a consumer credit bureau, they can provide extensive information on business owners. They even have a blended credit score that statistically merges the credit history of the small business and its owners or guarantors.

Equifax has the most financial trade payment information from banks, leasing companies and small business credit card issuers through its access to the Small Business Financial Exchange, or SBFE. Since the majority of small business credit activity is of the card, lease and line of credit types the SBFE information from Equifax is the best indicator of how leveraged a small business actually is. While Equifax carries public record data, they do not report UCC or collections information and demographic information is not a strong suit.