Experian Business Information Services was delighted to participate in a #CreditChat tweet chat recently. For the chat, we compiled some answers to frequently asked questions about business credit. Why should you separate business credit from personal credit? How do you establish business credit? Is it possible to build business credit with poor credit How do you get a business credit report? How are business credit scores determined How do you correct or dispute information on your business credit report? How do you get higher limits for your business credit? Five tips for establishing, building and monitoring business credit. Why should you separate business credit from personal credit If your business ever becomes at risk your personal credit score becomes at risk as well. And so maintaining separation can protect your personal credit profile should a financial mishap occur in the company or vice versa. Building separation between the two can also help your business develop the credibility that matters the bank's, lenders, suppliers and partners. How do you establish business credit? One of the first things you can do to establish small business credit is to file your business with your State by forming a corporation or LLC to operate your business under and obtain a FIN or EIN number from the IRS. Of course, comply with the business credit market requirements by obtaining proper licenses state and federal requirements for your business. Also, act as a business by establishing accounts (telephone utilities, leases, loans) all under the business name, not your personal name. Even if you operate as a sole proprietor or as a home-based office, prepare financial statements and a professional business plan. Be visible. Find companies willing to grant credit to your business without a personal guarantee. This is typically referred to as Trade Credit. Ensure that your good payment behavior is reported to Experian. Ask suppliers and other businesses that extend your business credit or payment terms to consistently report your payment history to Experian. Also, borrow and then pay on time. Manage your debt, stay current to your terms by making on-time payments and don't rely just on small business credit cards. Secure terms from suppliers or take out a commercial loan. And lastly, monitor your business credit report regularly check and correct outdated information. Be alert to important credit changes in your company's name. Is it possible to build business credit with poor credit If you have poor credit, you know, it's never too early to enable healthy management behaviors of separating personal from business credit risk and building business credit. But in the early startup stages, you may need to personally guarantee payments. But, the more you act like a business by establishing accounts in your business name, the more likely it is that you'll be able to negotiate and secure good credit terms without personal guarantees. How do you get a business credit report? Experian offers instant online access to business credit reports at the following websites: Experian.com/mybusinesscredit SmartBusiness Reports.com These sites easily help you monitor your own report or access a report on other businesses you can purchase a single report as needed or save with a subscription to a plan. How are business credit scores determined Experian collects business credit data from a wide range of sources such information is used to create a score that illustrates how your businesses historically met its financial obligations. This helps creditors to decide whether to extend credit to your company. Some of those sources include State Filing Offices, Public Records, Credit Card Companies, Collection Agencies, Corporate Financial Information, and Marketing Databases. If you are curious about the behaviors that impact your credit score you can always access our Score Planner Tool. This is a free tool that Experian offers. You can get in there and do what-if scenarios, modeling your current credit behavior and how that impacts your business credit score. It is a very useful tool and helps you build smart business credit. How do you correct or dispute information on your business credit report? First, you must have a copy of your business credit report. You can download that instantly at Experian.com/mybusinesscredit or SmartBusinessReports.com. Of course, review the details circling any incorrect information and you would submit that to BusinessDisputes@experian.com for investigation. That will open a ticket for your case and return to our self-service Web sites for future access and alerts on the case. How do you get higher limits for your business credit? You should monitor your business credit report and manage the factors that drive a good business credit score. And doing so can help you boost your credit score and improve your credit terms. Five tips for establishing, building and monitoring business credit. Act as a business by maintaining a distinctly separate business credit profile from your personal credit. Avoid surprises. Be proactive in monitoring your business credit score. Stay current on payments to creditors. It seems simple but it is great advice that just pay those bills on time. Don't let them go delinquent Ensure that your good payment history is reported to the credit bureau. Establish some good strong trade credit lines and make sure you're doing business with partners who are reporting to the credit bureau. Use business credit reports to limit your risk of doing business with others such as your business customers suppliers and vendors and partners.
Join our #CreditChat on Twitter on Wednesday, May 1st, at 3 p.m ET. This week, we’re talking about small business credit. Topic: Small Business Credit When: May 1st, 2019, at 3 p.m. ET. Easy ways to chat with us on Twitter: Tchat The panel will include: Rod Griffin: Director of Consumer Education and Awareness at Experian; Gary Stockton: Content Marketing for Experian Business Information Services; Chane Steiner: Chief Executive Officer at Crediful; Gerri Detweiler: Director of Education at Nav Inc.; Beverly Harzog: Credit Card Expert, Author and Consumer Advocate; Barry Moltz: Small Business Expert; Sylvia Inks: Small Business Finance Coach; Rohit Arora: CEO at Biz2Credit; Michelle L. Black: Credit Expert; and Jimarcus Blandin: Certified Global Business Coach & Speaker, Financial Literacy Expert. Don't miss it!
In celebration of Women’s History Month, Yelp has made it easier for customers to tell if a business is Woman-owned by enabling a special “Women-owned Business” attribute on their Yelp page. “We’re excited to help raise the profile of millions of women-owned businesses who drive the local economies of our cities and towns,” says Miriam Warren, Yelp’s vice president of engagement, diversity, and belonging. “We’re hopeful that this new attribute not only makes it easier to identify and connect with great women-owned businesses on Yelp, but that it also drives more dollars directly to the bottom line for these female-owned businesses.” To help build awareness among Women Business Owners, Yelp has partnered with Rebecca Minkoff’s Female Founder Collective to automatically list existing members as “Women-Owned” on their respective Yelp pages. If you are a Woman Business Owner and would like to self-identify as Woman-Owned-Business, you can do so by updating your Yelp page. Women are feeling empowered Much has changed for Women in the past five years. Women are feeling empowered — according to Visa’s State of Female Entrepreneurship report, 79 percent of American female entrepreneurs feel more empowered than they did five years ago. But 73 percent found funding to be a significant challenge in getting their business off the ground. By shining a light on Women-owned businesses, Yelp is taking an important step in highlighting female entrepreneurs, making them easy to identify and support.
Paying an invoice without carefully reviewing the company and invoice can cost your business more than just the amount paid. Invoicing fraud is when a third party sends a false invoice to an organization or business. In some cases, the invoice is for services or products that were never purchased or delivered. Other times, fraudsters send a bill with inflated pricing or a duplicate bill. Paying just a single fraudulent invoice can set your company up for being a victim of larger fraud down the line. Often, criminals send a small invoice for a common product, such as office supplies, to test the company’s process to see if they will pay the false invoice. If the business pays the invoice, the criminals know that the company does not carefully review and research the invoices they receive. Criminals then send additional invoices to the company to continue the fraud. Julie Johnson, Research Specialist at Association of Certified Fraud Examiners (ACFE) says that invoicing fraud appears to be on the rise. “The rise in technology offers fraudsters new and creative ways to commit invoice fraud as well as more options to hide their tracks,” says Johnson. According to a Lloyds Bank survey, 52 percent of respondents have experienced invoiced fraud, with law firms, HR companies, and IT businesses being most at risk. The survey also found that only 20 percent of the companies reviewed their invoices, and 37 percent do not have a process to prevent invoice fraud. Johnson says that in her experience, small businesses are most at risk for becoming victims to invoice fraud. “SMBs are often targeted because they typically don’t have the same set of resources as larger companies. They also may not have a procurement process to determine figures and track invoices,” says Johnson. Red flags to help spot invoice fraud before you pay While fraudulent invoices often look similar in format, and even in name, to legitimate invoices, many fraudulent invoices contain warning signs. When processing invoices, keep an eye out for the following red flags: Business directory invoices – Many fraudsters send a fake invoice to a company or individual employee about a business directory renewal. Johnson said that criminals with this particular scam often become aggressive and contact the company demanding to be paid. Web domain renewals – Johnson says that another common fraud is invoicing for web domain renewals. These invoices typically come from a different company than the one that sent previous renewal notices but may have an official or similar sounding name. More frequent bills – Be aware of how often bills arrive for specific products and services. Johnson has found that fraudsters will send a bill for a product more often than the legitimate company. For example, if you pay your printer rental fee once a month, but receive two bills in March, then you should contact the company before paying. No purchase order – Real invoices almost always contain the corresponding purchase order. However, many fraudulent invoices do not include a purchase number. Preventing invoice fraud Because it is challenging to catch fraudsters and recover money paid, the best strategy is to incorporate safeguards into your invoice payment process. Here are four things you can do to prevent becoming a victim of invoice fraud: Verify the company name on each invoice — Fraudsters often use company names similar to those of reputable companies. If you are not familiar with the company, do a Google search. Johnson says that if there is no internet information on a company, that’s a good indicator that something is not right. Compare the receipt of goods and purchase order with the invoice — Since fraudsters send invoices for goods you never received, you will not have a receipt of goods for fraudulent invoices. Check the payable address for each invoice — Another scheme is for a fraudster to send a bill with the name of a company you do business with but use a different payable address. Instead of sending your payment to the legitimate company, you pay the fraudster. Even worse than the fact that you lost money, you likely still owe your legitimate vendor. Use Experian BizID for Verification — Experian customers can do a business verification using the BizID to verify the address and phone number matches what is on file with Experian. Performing verification using BizID can also check if the address is potentially vacant or if it is a residential address; both should be considered red flags. You can also do reverse-looks up using the address and phone to see if there are multiple businesses at both data points is another check to consider. If you determine that you have received a fraudulent invoice, Johnson says to remember that you are not legally obligated to pay for goods or services that you did not order. “If you receive harassing calls from companies about fraudulent invoices, they have no legal action against you,” says Johnson. “After verifying that it’s not a legitimate invoice, do not pay the invoice.” By taking steps to catch and prevent invoice fraud, your company can reduce its chances of becoming a victim.
