Business Credit Report

A business credit report is the standard underwriting document for trade credit. A typical report contains firmographics (legal name, entity type, incorporation date, ownership, size), risk scores (payment scores like PAYDEX, failure/viability scores, delinquency scores), a trade payment section summarizing reported supplier experiences by recency and dollar band, public records (bankruptcies, judgments, tax liens), UCC filings showing secured lenders, and inquiry activity.

Reading a report well means knowing where each section is strong. The trade section is the heart of it: look at the number of experiences, total dollars reported, the trend of slowness over recent quarters, and the largest high credit extended — a supplier already comfortable at $200K tells you more than ten $2K accounts. Public records and UCC filings reveal what the scores compress: a blanket UCC filing from an asset-based lender means receivables and inventory are already pledged, and a recent tax lien is one of the strongest single predictors of failure.

Verify identity before relying on anything. Commercial data is matched by name and address, and reports for similarly named entities, franchisees, or a customer's dormant affiliate are a recurring source of bad decisions. Match the legal entity on the credit application to the entity on the report — and when a customer operates multiple entities, make sure the one you are underwriting is the one that will owe you the money.