After years of research, analysis and owning a company that formerly operated in that space, I can tell you unequivocally 98% of the information and the people selling business credit services are out to take your hard earned money. Here's the truth. You may not like it, but it's the truth nonetheless. There is no short cut to building good, solid, strong, viable business credit. It's like a fine wine, it gets better with time. There are important do(s) and don't(s) and I'm going to share them with you right here in this blog over the course of several blogs. Please feel free to share this information and subscribe to the blog so that you won't miss anything important in this new weekly series.
My strongest advice is to save your money and do it yourself. I will give you tips and details on what to do over the coming weeks. Might I remind you that some will charge you hundreds or even thousands for this same information. As a matter of service to the community and getting you to follow the excitement of this newly focused blog, I'm providing it to you for FREE.
First off, Business Credit is established in tiers. There are 4-5 tiers. If you have not established credit in the right tier in the proper order, your credit report at D&B will be flagged. D&B stands for Dunn & Bradstreet, the oldest business information sharing source in the world. D&B once decided who would and would not gain access to business credit. D&B became the world's largest Business Credit Bureau. Since business credit is not a consumer right, it has no regulation. The rules can be made up as you go. And changed by whomever is making said rules.
As absurd as it sounds, a D&B report does not even contain the names of any creditors. The report simply "describes" the type of creditor it may be. The report then lists the amount of credit "someone" claims you owe, terms and if you paid on time. Since there are no names of creditors, you may not have a real idea of who claims you owe them money. With this in mind, a D&B report may be more inaccurate than your personal credit report. But because you have absolutely no legal rights as far as business credit goes, it is nothing more than a tool that can be used against you at the sole discretion of the credit grantor.
After years researching this system, we now understand why it is most difficult for Black American Businesses to properly build credit and grow good business credit than say non-black owned companies. A number of Black owned businesses fall prey to this legal scam operated by the largest business credit bureau in the world. Many have no idea that negative information even appears on their report until it's too late. Since there is so much confusion about the business credit process, many will make calls to D&B looking for help and resolution. What you will get is a team of highly trained Inside Sales people who will lie their way into your pocket. Selling you useless credit building packages that at one time cost nearly a $1000.We too were fooled by this D&B tactic.These so called credit building packages allow you to provide D&B with the names & phone numbers of creditors that you have done business with that may not be reporting or showing on your D&B report. D&B promises to call and "verify" the credit you give them in exchange for you paying their fee. However, if none of your creditors are officially registered with D&B (which involves your creditors paying fees to D&B so that they could report your credit) and many aren't, then none of that credit will ever be added to your D&B report as promised and paid for. In other words, you have to pay AND your creditors have to pay! If those creditors decided not to pay D&B, then nothing you paid D&B for gets reported. And you will have wasted your money as it is totally nonrefundable. D&B Sales people will not "voluntarily" tell you this information. They are not obligated to do so. D&B is planning to rapidly expand this service in order to "compete" with the thieves who show up high in google searches claiming to offer similar business credit services. D&B recently started a massive hiring of Inside Sales people to "target" those whom I suspect do not know any better.
If you think that information is alarming, then you will find the following to be even more so. Your D&B report contains a complete analysis of your type of business. This includes your location details (home-based, type of building or structure, general neighborhood). Your D&B report contains a complete analysis of your company's industry type which includes the rate of failure in your industry. Your report contains other "stressors" that even warns a potential credit about lending to your type of company which is based on "other people's failure" not how well your company is paying. D&B even makes specific recommendations as to whether you are credit worthy or not which have nothing to do with your overall credit score. Even with an excellent score, D&B can recommend that a credit grantor should not extend credit to you.
The promises of an 80 paydex score. D&B works on a "scoring system" that ranges from 0-100. 80 is suppose to be the magic number that sends a message to creditors that you pay bills on time. Building up your paydex score (D&B's official name for your business credit score) is EASY using starter credit like small accounts at uline, quill etc. Just about anyone will trust you and open what is known as a "net 30 account" with a $150-$300 starting credit limit each. These small accounts will certainly build the 80 paydex score if paid on time. Here's the hidden problem.
In the case of many newly opened Black owned companies, your 80 paydex score can be rendered useless. If you own a certain type of business or in a certain neighborhood or in a certain industry......your score is NOT the only factor in making a credit decision. It's the REST of your report that's effecting your business credit. And the REST of your report is CONTROLLED and DETERMINED by staff at D&B. No amount of money nor credit building services will help you escape this fact! If you own or operate a business in what some consider the WRONG INDUSTRY or if D&B staffers believe your industry is one plagued by failure, then your D&B report in eternally doomed! Unfortunately for many Black owned companies, these reports are nothing more than tools of legal discrimination. Real knowledge is real power!
In Part 2 we will discuss your best alternatives. Where there's a will there's a way. Save your money, do it yourself and follow this blog.
Swan Simpson @FilmworksCEO is an Opinionated, Politically Incorrect, Agent, Intelligent Brand Developer, Filmmaker, TV Producer, Writer, Blogger, Entrepreneur, Spiritual Thinker, Sports Fanatic. The views expressed in this blog are certainly my own and do not reflect the views or opinions of anyone other than me (friendly disclaimer). http://swandriasimpson.brand-yourself.com/
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