Have you ever been refused credit (either personally or your company) and not known why?

Have you ever requested credit reports to review your credit rating? Do you supply Dun & Bradstreet (D&B) or other credit bureaus with quarterly or annual financial information?

Checking your credit file regularly and not supplying too much information to credit bureaus eliminates headaches and horror stories later.

If you haven’t been ordering credit reports on your own business and yourself regularly-START NOW. (Look under “Credit Reporting Agencies” for the names of companies to call.) In addition to reports on yourself and your business, get one on anyone else in your company who might be required to sign a note for a business loan.

Unfortunately, everything is computerized and many clerical errors are made that are never caught. One of my clients had an experience where incomplete information was sent to a credit bureau several years ago. Based on the current and prior information, the credit agency put together an erroneous report based on the prior information. They did not state the information was old, and the erroneous information was detrimental to my client.

When we called the credit agency, they apologized, but said it was the best information they had, and our client should have furnished them with current information.

Credit bureaus hire many low-paid clerical workers to input data; they are not hired to think. Missing last sentence on the page…key punch errors or other clerical errors that are not caught. These errors can haunt you for years afterwards if you don’t catch them and stay on the credit agency to make the changes. Too often, agencies will not make the changes. There are even cases where individuals and companies have sues the bureaus. Some of the cases have gone as high as the United States Supreme Court. In 1985 an injured agency collected an award of $385,000 for libel judgment against a credit agency.

Before you furnish a credit report agency, such as Dun & Bradstreet (D&B) or TRW Information Services, with your company’s financial history, reason out whether you need to. If vendors require information, you may be able to furnish it to them directly, with no need to furnish that information to the credit bureau. Don’t forget—competitors may have access to the credit reports and can get pertinent information from them which could backfire on you—e.g., gross margin, financial strength of the company, etc.

 However, if you must furnish the information to credit bureaus:


  1. Don’t give detailed information; give a skeleton of key numbers. For example:
  • Sales
  • Net Income (nothing between0
  • Total assets
  • Total liabilities
  • Net worth
  1. Never give gross margin or operating expense information.
  2. Make sure you check your credit report.
  • Get copies of your credit reports quarterly.
  • Correct inaccurate information and bring it to the agencies’ attention immediately. Demand they investigate and correct all errors.
  • Attempt to identify the source of any bad information.
  • If they don’t change the report, demand that they note your contention on your credit report.
  • If the information is not corrected, warn your creditors (banks and vendors) that the credit reports are faulty.
  • Send additional information to credit bureaus that will enhance your credit picture.
  • If appropriate, provide a list of credit references to suppliers and bank lenders.


When refused credit, don’t forget the Fair Credit Reporting Act. This law does not apply to commercial credit reports on businesses, except in a situation where the decision is based on personal financial data. However, as an individual your rights under the law are:

Refused credit based on information in a credit report—The name of the credit agency must be revealed. You are entitled to a free copy of the report.

Refused credit based on information in a credit report—The name of the credit agency must be revealed. You are entitled to a free copy of the report.

  • Incorrect information on the credit report—You have the right to dispute the report and have the agency reinvestigate any challenged information. If the disputed information cannot be verified or the information sources do not respond in a reasonable time, the credit agency is obligate to remove the disputed information.
  • Missing last sentence…reinvestigating, the source confirms the information as correct, then you have the right to add a statement to your credit file (limited to 100 words).
  • You have the RIGHT to demand that the credit bureau:
  1. Send corrected credit reports to everyone receiving an erroneous report in the prior six months.
  2. Reveal the nature and substance of all the information it has about you, and identify the information sources.
  3. Furnish you with the names of all the businesses that requested your credit report during the prior six months.

Adverse credit information must be removed after seven year, except bankruptcy information, which can remain for up to ten year.


Avoid Credit Report Mistakes

      Too many small companies experience horror stories about credit ratings and credit reports unnecessarily. Remember:

  • Don’t furnish information unless absolutely necessary. If you have any doubts, ask your CPA.
  • If you have to furnish the information, update it periodically. Get copies.
  • If you find inaccurate information, insist changes be made.
  • Supply skeleton information—don’t forget your competitors.
  • Ask suppliers if they would rather have information directly.